ED Probes Alleged Over Rs 300-Crore Crypto Investment Scam; Bengaluru Influencer Under Scanner

The Directorate of Enforcement (ED) has initiated a money laundering investigation into an alleged cryptocurrency fraud, which involved offering investors discounted allocations of virtual digital assets that were not delivered as promised.

According to the ED release, the case involves over-the-counter (OTC) cryptocurrency transactions and was registered based on an FIR filed by the Cyber Crime Police Station, South Andaman, following a complaint by a Dutch entity. The alleged fraud is estimated at around USD 35 million (approximately Rs 336 crore).

How Investors Were Allegedly Lured

The accused allegedly attracted investors through OTC crypto deals by claiming access to discounted token allocations from various blockchain projects, which include MultiverseX, Kava, BEAM, GRASS, SUI, VANA and AGLD.

They allegedly used private groups, social media platforms such as Telegram, WhatsApp and Instagram, websites and personal meetings to gain investors' confidence.

The accused initially completed smaller transactions to build investors' confidence. After getting larger investments through cryptocurrency wallets, they stopped delivering the promised token allocations.

The accused allegedly projected themselves as key opinion leaders (KOLs) in the crypto industry and claimed access to private token offerings. The proceeds were allegedly diverted towards personal expenses, investments in movable and immovable properties, and business activities.

Who Was Behind The Alleged Crypto Scam

The agency has named Mohammed Waseem, Saurabh Diwan and Vaibhav Gupta among the accused in the case. They show themselves as credible figures in the cryptocurrency sector and claim to have connections with blockchain developers that allowed them to offer tokens at discounted rates before public launches.

The investigation also found that funds collected through cryptocurrency wallets were allegedly routed to Ravindra K, a Bengaluru-based individual who has been identified as the alleged mastermind behind the OTC crypto deals.

During searches conducted on July 18 and July 19 at multiple locations, ED officials seized digital devices, email records and cryptocurrency wallets allegedly linked to the movement of funds. The searches also resulted in the seizure of 8,700 USDT in virtual digital assets.

ED said the original FIR had estimated the alleged fraud at around USD 10 million. However, searches revealed that the value of the alleged fraud was around USD 35 million, with investigators finding indications that other foreign investors and entities may have also been affected. The investigation into the matter is ongoing