The Enforcement Directorate (ED), one of India’s premier law enforcement and economic intelligence agencies, has frozen cryptocurrency worth around $1.5 million.
The cryptocurrency was frozen in relation to an ongoing money-laundering investigation in connection with a gaming app called E-Nuggets.
The E-Nuggets Investigation
The investigation into the E-Nuggets gaming app started in February 2021, when regulators filed a complaint in the eastern Indian city of Kolkata. The complaint named an individual, Aamir Khan, the app’s creators, and a host of other individuals. The Enforcement Directorate had also searched six other locations in relation to the case and recovered over $2 million in cash at the accused’s residence.
According to law enforcement agencies, Aamir Khan and his accomplice, Nesar Ahmed Khan, launched the E-Nuggets app with the intention of defrauding users. In a press release, the Enforcement Directorate highlighted how the creators tricked the app users.
“After collecting a sizable amount of money from the public, all of a sudden withdrawal from the said app was stopped on one pretext or the other. Hereafter, all data including profile information was wiped from the said app servers.”
Funneling Money Abroad
The Enforcement Directorate investigation also revealed that the accused were transferring their gains overseas through cryptocurrency exchanges. The accused created a dummy account on WazirX, a prominent Indian cryptocurrency exchange under the name of Sima Naskar. The account was used to transfer money to another account on Binance, the world’s largest cryptocurrency exchange.
The Binance account was revealed to hold around 77 BTC, worth around $1.5 million, which was frozen by the authorities. WazirX revealed that it had been cooperating with the Indian investigative agencies, stating,
“WazirX that it has been cooperating with the ED by giving them all the pertinent facts, information, and documents that the investigators were looking for.”
Binance Assisting Law Enforcement
Binance revealed the exchange had frozen the funds in the account in question upon the request of the Enforcement Directorate. It further added that Binance maintains its position that it will cooperate fully with valid legal requests and inquiries from agencies. It added in a statement,
“The transparent nature of blockchain means that the transactions are publicly available and traceable – which is not an option with traditional financial transactions. Every day, Binance assists a large number of law enforcement investigations to detect criminal activities. We can confirm that Binance froze the funds at the request of the Enforcement Directorate. It’s our position to cooperate fully and collaboratively with all legally valid requests and inquiries.”
Accused Still Absconding
While the ED and other law enforcement agencies have searched several locations in connection with the accused and recovered millions in cash from Khan’s residence, the accused remains on the run. This is not the first time Indian authorities have taken strict action against crypto companies.
In August, the Enforcement Directorate had frozen assets worth $46 million belonging to crypto lender Vauld. The firm had halted deposits and withdrawals in July. It had also frozen bank accounts belonging to cryptocurrency exchange WazirX. The agency unfroze the exchange’s bank accounts only recently after active cooperation from the company.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.