The Enforcement Directorate (ED), an Indian law enforcement agency, has successfully seized 90 crores ($10.5 million) from E-Nuggets, an online scam app, with the assistance of crypto exchanges such as Binance, ZebPay, and WazirX.
According to a report by the Hindu, E-Nuggets, an online gaming app, had cryptocurrencies worth $10 million stored in 70 different crypto wallet accounts across the three exchanges. The ED contacted the exchanges to block the wallet addresses and transfer the crypto assets to the agency’s wallet.
The ED’s report alleges that E-Nuggets falsely presented itself as a gaming platform while offering customers high returns on investment. The app enticed users with real-money games that promised large commissions, but once money was invested, the app disappeared, leaving investors unable to retrieve their funds.
In total, the agency has seized properties valued at over 163 crores ($19.5 million), including cash, cryptocurrency, account balances, and office space.
The E-Nuggets scam was first discovered in 2022 when some of the company’s funds were invested in digital assets. The investigation revealed 2,500 dummy bank accounts and 19 crores ($2.2 million) in cash.
The alleged mastermind behind the scheme, Aamir Khan, along with his accomplice Romen Agarwal, has been arrested and is currently in custody.
Thanks to the use of digital assets for money transfers, law enforcement agencies were able to trace and freeze the funds. Critics often raise concerns about cryptocurrency being used for money laundering, but the transparent nature of blockchain technology makes it difficult to launder funds once identified. Crypto exchanges have successfully traced and frozen funds linked to criminal activities in the past.
One notable example is the 2016 Bitfinex hack, where hackers stole 119,756 Bitcoin (BTC) from the exchange. However, the individuals behind the hack were eventually caught and arrested in 2022 while attempting to launder the stolen funds.
Cointelegraph reached out to Binance and ZebPay for comments but did not receive a response at the time of publication.
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