New Delhi, Feb 15: The Enforcement Directorate (ED) has made its largest ever seizure of cryptocurrency, valued at Rs 1,646 crore, as part of a substantial money laundering investigation linked to a fraudulent investment scheme that misled numerous depositors under the guise of securities investment, according to official sources.
The agency’s Ahmedabad office also confiscated Rs 13.50 lakh in cash, an SUV, and several digital devices following a recent search related to the “fraudulent” and unregistered sale of securities through the ‘BitConnect lending program’.
This case, initiated under the Prevention of Money Laundering Act (PMLA), originates from an FIR filed by the Surat Police crime branch, highlighting alleged fraudulent activities between November 2016 and January 2018, occurring after the demonetization event.
To navigate the intricate network of transactions involved, the ED deployed a team of technical experts who scrutinized various cryptocurrency wallets to identify their origins and controllers.
Investigators discovered that many of these transactions were facilitated through the “dark web,” aimed at making them untraceable. Sources indicate that the agency traced multiple web wallets and gathered ground intelligence to locate the wallets and the locations of the digital devices holding the cryptocurrencies.
According to sources, cryptocurrencies worth Rs 1,646 crore were seized and transferred into a special crypto wallet operated by the agency, marking this as the largest seizure of digital assets to date amid an ongoing money laundering investigation.
The investigation revealed that the founder of BitConnect, an unregistered organization, created a vast network of promoters, compensating them with commissions for their promotional activities. To entice investors to contribute funds in cash and Bitcoins to the supposed lending program, BitConnect falsely claimed it would use a proprietary “volatility software trading bot” to generate returns of up to 40 percent per month.
Promoters consistently posted false returns on the BitConnect platform, showcasing an average of 1 percent daily returns—equating to about 3,700 percent annually. Sources describe these claims as deceptive. The accused were aware that BitConnect did not actually deploy investor funds for trading through its claimed Trading Bot; instead, they misappropriated those funds for personal gains, transferring them to wallet addresses under their control.
Previously, the agency had attached assets valued at Rs 489 crore in relation to this case.
Additionally, it was noted that foreign nationals also invested in BitConnect, and the primary suspect is currently being investigated by federal authorities in the United States. (Agencies)
