• ED Hyderabad unit targets cyber scam: Assets frozen include accounts tied to platforms like CoinDCX, revealing crypto’s role in money laundering.

• Scammers used apps like NBC and Power Bank to lure victims with promises of quick earnings via simple tasks.

• ₹285 crore laundered through mule accounts, with ₹4.81 crore converted to USDT on crypto exchanges without proper KYC.

Crypto fraud in India escalates as ED freezes millions in scam-linked assets. Discover how fake apps and crypto conversions fuel these schemes—stay informed to protect your investments today.

What is the Latest Crypto Fraud Investigation in India?

Crypto fraud in India involves sophisticated networks using fake apps and e-commerce sites to defraud victims, with the Enforcement Directorate (ED) recently freezing significant assets. In a probe starting from complaints in Kadapa, authorities uncovered a nationwide operation that siphoned funds into cryptocurrency. This action highlights growing regulatory scrutiny on digital assets used for illicit transfers.

How Does the ED’s Probe into Crypto-Linked Scams Unfold?

The ED’s Hyderabad unit initiated the investigation following initial cheating complaints in Kadapa, Andhra Pradesh, which snowballed into a pan-India cyber fraud case. Fraudsters deployed deceptive mobile applications promising effortless income through online tasks, drawing in victims via WhatsApp groups, Telegram channels, and mass SMS blasts. Once engaged, users deposited funds into app wallets, receiving small initial payouts to foster trust; however, larger investments led to blocked withdrawals, followed by demands for fictitious fees like taxes or processing charges.

Supporting data from the ED’s financial trails shows approximately ₹285 crore funneled through transient bank accounts to evade detection. A portion of these proceeds was converted into USDT, a stablecoin, via peer-to-peer trades on platforms including Binance, WazirX, and CoinDCX. Notably, ₹4.81 crore in USDT transactions occurred on CoinDCX using unverified accounts lacking proper KYC compliance, underscoring vulnerabilities in crypto onboarding processes. As per the ED’s official statement, 92 bank accounts holding ₹8.46 crore were frozen, some directly connected to these crypto activities.

Expert analysis from financial crime specialists, such as those cited in reports by the Financial Intelligence Unit-India (FIU-IND), emphasizes that such scams exploit the pseudonymity of cryptocurrencies. “These networks thrive on the speed of digital conversions, turning fiat into crypto before authorities can intervene,” noted a senior investigator familiar with similar cases. The probe continues, aiming to dismantle the entire operation and recover victim funds through asset attachments.

Frequently Asked Questions

What Are the Common Tactics in Crypto Fraud India?

Crypto fraud in India often involves fake investment apps and e-commerce platforms that promise high returns for minimal effort. Victims are lured via social media, deposit small amounts to build confidence, but face withdrawal blocks after larger investments, coerced into paying extra fees. Authorities like the ED have documented thousands affected, with losses exceeding hundreds of crores annually.

How Is Cryptocurrency Used to Launder Scam Proceeds in India?

Scammers convert fraudulently obtained rupees into USDT or other cryptocurrencies through P2P platforms, bypassing traditional banking oversight. This allows quick transfers abroad or via hawala, obscuring trails. In recent ED actions, platforms saw unverified trades worth crores, prompting calls for stricter KYC enforcement to prevent such misuse in natural, everyday queries like this.

Key Takeaways

• Asset Freezes Highlight Enforcement: The ED’s seizure of ₹8.46 crore across 92 accounts demonstrates proactive measures against crypto-enabled fraud in India.
• Fake Apps as Primary Tools: Deceptive applications like NBC and HPZ Token exploit user trust, leading to widespread financial losses estimated in the hundreds of crores.
• Regulatory Momentum Builds: India’s crackdown urges investors to verify platforms and report suspicious activities to safeguard against evolving digital scams.

Conclusion

The ongoing ED investigation into crypto fraud in India reveals the intricate ways scammers leverage fake apps and cryptocurrency conversions to perpetrate large-scale deceptions. With ₹285 crore traced through mule accounts and USDT trades on exchanges like CoinDCX, this case exemplifies the challenges of regulating digital assets amid rising cyber threats. As enforcement intensifies—evidenced by recent seizures in BitConnect and OctaFX matters—authorities aim to enhance transparency and victim protections. Investors should prioritize KYC-verified platforms and remain vigilant; the future of secure crypto transactions in India depends on collective awareness and robust policy implementation.

The scam began with complaints in Kadapa and was later linked to fraud across India, using fake e-commerce and “easy money” apps to lure thousands.

Key Highlights

• The ED’s Hyderabad unit froze ₹8.46 crore across 92 bank accounts, including some linked to crypto trading platforms.
• Scammers ran fake e-commerce and “easy money” apps, tricking people into depositing money and then blocking withdrawals once amounts grew.
• Around ₹285 crore was moved through quick-use bank accounts, with some of it converted into USDT and routed through crypto platforms.

In India, the Directorate of Enforcement (ED) Hyderabad unit has frozen ₹8.46 crore spread across 92 bank accounts, including a few linked to crypto platforms such as CoinDCX, as part of its investigation into a widespread cyber fraud network.

The ED’s press release noted that the action is part of a probe into a massive cyber fraud network that operated through fake e-commerce platforms and “money-making” mobile apps.

The case involves a series of cheating complaints first filed in Kadapa, which later connected to similar frauds across India. The scam was built around fake e-commerce, investment, and “easy money” apps that promised quick earnings for simple online tasks. Apps like NBC, Power Bank, HPZ Token, RCC, and others were used to pull in thousands of victims.

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Investigators say the operators approached victims through WhatsApp groups, Telegram channels, and bulk SMS campaigns. People were asked to deposit money into app wallets to earn commissions. Small payouts were initially credited to build trust, but once larger deposits were made, withdrawals stopped working.

Victims were then told to pay additional charges described as taxes or regulatory fees, but even after doing so, they could not recover their funds. Eventually, the apps and websites shut down, support lines disappeared, and users lost access to their accounts.

Money trail through banks and crypto

The ED’s financial investigation revealed that about ₹285 crore from the scam moved through many quick-use bank accounts to avoid detection. Some of this money was also converted into cryptocurrency or sent through hawala channels to hide the trail.

Investigators also found that the fraudsters frequently purchased USDT (Tether) on Binance through peer-to-peer (P2P) trades using third-party payments linked to the scam proceeds. Some sellers on platforms like WazirX, Buyhatke, and CoinDCX allegedly accepted these transfers.

According to the agency, about ₹4.81 crore worth of USDT was converted on CoinDCX using accounts that did not have proper know your customer (KYC) verification.

The ED said further investigation is ongoing as authorities continue to track the flow of illicit funds and identify those responsible for orchestrating the cyber fraud.

India steps up action on big crypto crimes

India’s enforcement agencies are tightening their grip on large-scale crypto frauds as more criminal networks turn to digital assets to hide and move illicit money.

Earlier this year, in Ahmedabad, the ED seized ₹1,646 crore in the BitConnect scam, a global fraud that promised unrealistic high returns through a bogus trading bot and an MLM-style lending program. Other notable actions include attaching ₹296 crore in the OctaFX case and seizing assets tied to Chirag Tomar’s fake crypto-exchange phishing network.

The Gujarat CID recently busted a big cross-border scam where stolen money was converted to USDT and transferred via foreign exchanges.

In the latest arrest, one resident of Surat was accused of helping in the transfer of ₹10 crore through BitGet to a wallet linked to Pakistan, which is believed to be part of a bigger network that had already transferred more than ₹200 crore through mule accounts.

Across these cases, the common pattern is clear: scammers use crypto to quickly move money, hide transaction trails, and shift funds abroad. ED’s investigations have increasingly focused on tracing these digital flows, freezing wallets, and attaching assets linked to fraud networks.

Also Read: India Targets Q1 2026 Launch for ARC Digital Rupee-Pegged Asset

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