India's ED targets decade-long crypto Ponzi in 21-location raid

Source: Cryptonews Original Title: India’s ED targets decade-long crypto Ponzi in 21-location raid Original Link: https://crypto.news/indias-ed-targets-decade-long-crypto-ponzi-in-21-location-raid/ India’s Enforcement Directorate (ED) conducted coordinated raids at 21 locations across Karnataka, Maharashtra and Delhi on December 18, targeting an organization accused of operating a cryptocurrency fraud scheme.

The operation, carried out under the Prevention of Money Laundering Act (PMLA), focused on offices and residences linked to 4th Bloc Consultants and its associates. Investigators allege the scheme defrauded investors in India and abroad over nearly a decade.

According to the ED investigation, the alleged perpetrators operated through fictitious investment platforms designed to resemble legitimate global cryptocurrency exchanges. The platforms featured personal dashboards, real-time balances and transaction histories. However, no actual market transactions occurred behind the interface.

Investigators described the structure as a Ponzi scheme or multi-level marketing (MLM) model, in which funds paid by users were allegedly laundered through the organization.

Fabricated Credibility

The group allegedly used images of known cryptocurrency commentators and public figures without authorization to enhance credibility. These fabricated testimonials reportedly served to attract new investors.

The scheme allegedly paid initial investors small returns to establish trust. Victims were then encouraged to invest larger amounts and recruit new members through referral bonuses. The organization used social media platforms including Facebook, Instagram, WhatsApp and Telegram to expand the network internationally.

Complex Fund Concealment

Seized funds were moved through a complex concealment system including:

• Multiple cryptocurrency wallets used to divide and obscure sums
• Hawala transactions
• Paper companies
• Channels to transfer funds outside regulated banking systems
• Undeclared foreign accounts where cryptocurrency was converted to cash through peer-to-peer (P2P) transactions

Authorities identified numerous digital wallet addresses during the searches and seized movable and immovable assets acquired with alleged proceeds from the activities.

Investigators said the operation allegedly dates back to at least 2015. The promoters adapted their techniques over the years to evade detection as cryptocurrency regulations evolved. The ED stated that analysis of seized servers and devices continues and the investigation remains ongoing, with the goal to map the network of foreign entities involved and recover funds to compensate victims.