The enforcement directorate announced that it has arrested a cryptocurrency trader in relation to a money-laundering probe linked to an online betting scam case in China
The accused was found to have purchased Tether cryptocurrency on behalf of the accused company and transferred them to unknown wallets through foreign exchanges
Between 2017 and 2019, Indian investors are estimated to have lost more than $500 Mn in cryptocurrency scams
In yet another crypto scam case in India, the Enforcement Directorate (ED), on Friday (December 11), announced the arrest of a cryptocurrency trader, a resident of Bhavnagar, Gujarat, in connection with a money-laundering probe linked to an online betting racket with Chinese operators. According to the central law enforcement agency, the scam is estimated to be worth over INR 1,000 Cr and involved cryptocurrency trading through multiple exchanges.
The person arrested has been charged under sections of the Prevention of Money Laundering Act (PMLA) and he has been sent to the ED custody till December 22 by a court.
The accused was found to have purchased Tether or USDT cryptocurrency on behalf of one of the accused companies and transferred them to unknown wallets on foreign exchanges.
Tether belongs to a class of cryptocurrencies known as fiat collateralised stablecoins, that is, a fiat currency like the US dollar, the euro or the yen, backs each crypto coin in circulation. Since 2017, Tether has been embroiled in controversies, ranging from online thefts to lack of transparency and audits, owing to several concerns raised by regulatory authorities in the US.
“It was found that the accused person had knowingly and actively involved himself in layering the proceeds of crime and hence he was arrested,” read the ED’s statement.
The case came to light after the ED conducted multiple raids at the registered offices of companies where directors and chartered accountants were allegedly found to be involved in running illegal online betting operations on websites hosted outside India and operated by Chinese nationals.
The ED’s case is based on a Telangana police FIR that was filed against Dokypay Technology Private Limited, Linkyun Technolgy Private Limited and others and the police had also arrested three people including a Chinese national.
The three were subsequently arrested by the ED too under criminal sections of the anti-money laundering law.
Notably, the use of cryptocurrencies for scams isn’t a new practice in India, where a lack of regulation for cryptocurrencies means a sufficient grey area for nefarious actors to operate.
According to data quoted by cryptocurrency news platform Cointelegraph, between 2017 and 2019, Indian investors have lost more than $500 Mn in cryptocurrency scams operated within the country and abroad.
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