Enforcement Directorate Seizes $58 Million in Crypto Laundering Scheme

The Directorate of Enforcement (ED) has attached movable assets worth Rs 433 crore in a money laundering case against Divyesh Darji, the Asia head of a UK-based crypto company - Bitconnect, and others for their alleged involvement in a crypto-currency scam in Gujarat. The assets, including cryptocurrencies, gold, cash (in INR and USD), are believed to be proceeds of crime and were attached under the Prevention of Money-Laundering Act (PMLA), 2002. The investigation revealed that the assets were not acquired out of legitimate income but were obtained through commission of scheduled offenses under the PMLA.

Enforcement Directorate Uncovers Massive Crypto Laundering Scheme, Attaches Properties Worth Rs 433 Crore

In a groundbreaking move, the Enforcement Directorate (ED) has seized movable properties valued at Rs 433 crore in connection with a money laundering case against Divyesh Darji, the Asia head of UK-based crypto company Bitconnect, and his accomplices. The alleged involvement of these individuals in a sophisticated crypto-currency scam has resulted in the fraudulent acquisition of vast sums of money from unsuspecting investors.

The attached properties, consisting of cryptocurrencies, gold, and cash (both Indian rupees and US dollars), represent the proceeds of the criminal activities. The assets were frozen under the provisions of the Prevention of Money-Laundering Act (PMLA), 2002, the ED announced on Monday.

The investigation, initiated by the ED based on First Information Reports (FIRs) filed by the Gujarat Crime Investigation Department (CID), has uncovered a web of illicit transactions. The accused, including Darji, Satish Kumbhani, and Shailesh Bhatt, face charges under various sections of the Indian Penal Code, the Gujarat Protection of Interests of Depositors Act, and the Prize Cheat Money Circulation Scheme Banning Act.

Through meticulous analysis, the ED has established that the attached assets were not acquired through legitimate means but rather as a result of offenses covered under the PMLA. The investigation revealed that from November 2016 to January 2018, Kumbhani, the promoter of Bitconnect Coin, established an international network of promoters to entice individuals to invest in schemes linked to the cryptocurrency.

The agency's findings indicate that Kumbhani and his associates lured investors with the promise of exorbitant returns. However, a substantial portion of the investments was siphoned off and misappropriated by the accused. "Later, a part of the proceeds of crime acquired by Satish Kumbhani and his associates was extorted by Shailesh Bhatt and his accomplices by kidnapping two associates of Satish Kumbhani," the ED stated in a press release.

The provisionally attached movable properties constitute a portion of the illicit gains amassed by Kumbhani, Bhatt, and their co-conspirators. Divyesh Darji, the prime suspect in the case, was apprehended at Delhi airport in 2018 while returning from Dubai.

Darji, a resident of Surat's Adajan area, allegedly defrauded investors to the tune of USD 12.7 billion through Bitconnect.in, the Indian division of the UK-based Bitconnect.com. He was also implicated in a Rs 22,000 bitcoin scam and subsequently in another Rs 1,000 crore Dekado coin scam. This marks the third major case involving Darji.

The ED's swift and decisive action sends a clear message to individuals engaging in illegal crypto-currency scams. The agency's commitment to combating money laundering and protecting investors' interests is unwavering. The investigation is ongoing, and further arrests and attachments are expected as the ED delves deeper into the intricacies of this illicit network.