- The Indian authority has unveiled a $35 million crypto OTC scam in a recent investigation.
- A trio allegedly defrauded investors by providing fake promises of discounted tokens.
- The country has strengthened its crypto regulations as scams and hacks continue to surge.
India has tightened its scrutiny over crypto scams and related threats. In the latest development, India’s Enforcement Directorate (ED) launched a money laundering probe into an alleged $35 million crypto over-the-counter (OTC) trading scam. While the crypto OTC scam initially reported the loss of just $10 million, the investigation has now revealed that the suspected fraud may have grown to more than three times the initial amount.
The ED stated that the illegal players lured investors with fake promises of discounted crypto token allocation through OTC deals. But the accused has failed to deliver these tokens as promised after collecting millions of dollars from the victims.
$35M Crypto OTC Scam Unveiled in India
According to a report, the Enforcement Directorate of India has launched a probe into a crypto OTC scam. The money laundering investigation is led by the ED’s Bengaluru Zonal Office, under the Prevention of Money Laundering Act (PMLA), 2002.
Notably, the ED’s probe was initiated after a Dutch company filed a complaint against the alleged crypto OTC scam. According to the complaint, the company was defrauded by the scammers in the OTC deal involving virtual digital assets (VDAs).
As reported by the ED, the accused failed to keep their promises of offering cryptocurrencies at discounted prices. Many investors received only a portion of the promised amount, and others didn’t get a token at all. This has led to major financial losses for all the investors who were targeted in the crypto OTC scam.
How Were the Victims Defrauded?
It is significant to mention that the ED revealed three main names in the ongoing money laundering case investigation. They are Mohammed Waseem, Saurabh Diwan, and Vaibhav Gupta, who are reportedly the accused in the crypto OTC scam.
Further, the Indian investigators explained the trio’s orchestration and execution of the crime. According to the ED, these three men used private Telegram groups and personal meetings, and presented themselves as trustworthy entities in front of the victims. Before convincing investors to commit larger amounts, the alleged trio carried out smaller OTC transactions initially.
After collecting these significant funds, the team moved them through multiple crypto wallets apparently to conceal the origin. These funds were reportedly transferred to the account of Ravindra K, a Bangalore-based individual. The ED suspects him to be one of the key players in the crypto OTC scam.
India Strengthens Regulations to Fight Scams
As crypto scams and hacks continue to grow in India, the country is now strengthening its grip on the industry. As CoinEdition reported earlier, the Indian government is launching new crypto regulations, focusing beyond tax rules.
For example, the Reserve Bank has reiterated its restrictive stance on cryptocurrencies. While the country continues not to recognize digital assets as legal tender, the bank wants to keep financial institutions away from crypto exposure. The country has also strengthened its Prevention of Money Laundering Act (PMLA) and Anti-Money Laundering (AML) rules to safeguard investors.
Related: India’s ED Tightens Probe Into $58M Crypto Scam, Three Arrested
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