Crackdown on Cryptocurrency Fraud by Enforcement Directorate

The Enforcement Directorate (ED) has initiated a significant operation against cryptocurrency-related fraud, undertaking searches in Delhi, Jaipur, and Mumbai under the Foreign Exchange Management Act (FEMA). These raids, which seek to expose a large-scale scam involving illegal crypto conversions estimated at around ₹600 crore, are part of an ongoing investigation, as the agency announced in a press release on Monday.

Background of the Investigation

The investigation was prompted by a newspaper article revealing the fraudulent actions of Chirag Tomar, an Indian citizen currently incarcerated in the US for defrauding over $20 million (approximately ₹144 crore). Tomar’s scam featured counterfeit websites mimicking the well-known cryptocurrency exchange, Coinbase.

Modus Operandi of the Fraudsters

According to the investigation, these fake websites were engineered to rank highly in search engine results using malicious SEO tactics, tricking users into providing their login details. Upon entering their information, victims were presented with incorrect account details and encouraged to call a bogus customer support number, connecting them to a fraudulent call centre operated by Tomar and his associates.

Once the fraudsters acquired access to victims’ cryptocurrency accounts, they quickly transferred the assets to wallets under their control. The misappropriated funds were later sold on localbitcoins.com and converted into Indian Rupees through local crypto exchanges.

Financial Trail and Seizures

The ED’s inquiry uncovered that a considerable portion of these ill-gotten gains—₹15 crore—was transferred into bank accounts owned by Chirag Tomar and his relatives. Consequently, authorities have frozen several bank accounts associated with the Tomar family, with ₹2.18 crore already seized.

Wider Implications of Cryptocurrency Fraud

During the search operations, the ED also identified further cases of cryptocurrency fraud related to dubious crypto sales on localbitcoins.com, with subsequent conversions to INR through Indian crypto platforms. This indicates a larger network of cybercriminals taking advantage of digital currencies for unlawful financial ventures.

The ED is committed to providing further details as the investigation progresses, with additional seizures and legal actions anticipated in the upcoming days.