- The ED of India has arrested three individuals connected to a $58 million crypto scam.
- The mastermind of the Ponzi scheme, Subhash Sharma, is still found missing.
- The country has also seized $2.2 million in stolen funds related to another incident.
India’s Enforcement Directorate (ED) has reportedly intensified its probe into an alleged $58 million (INR 500 crore) crypto scam. While this incident marks one of the largest crypto fraud cases in the country, the ED has arrested three more accused as part of the ongoing investigations.
According to a press release by India’s ED, the agency arrested Milan Garg, Sukhdev Thakur, and Abhishek Sharma in the latest phase of the investigation. Subhash Sharma, the alleged mastermind of the crypto scam, is still found missing.
How Did the Crypto Scam Work?
The crypto scam lured investors through fake promises of high returns. The group behind this fraud operated multiple fake crypto investment platforms as part of a Ponzi scheme. These platforms included Korvio, DGT, Hypenext, and A-Global.
More than 248,000 investors have been defrauded in this scam. As usual in a Ponzi scheme, the group used funds from new investors to pay earlier ones, resulting in massive transactions worth over $219 million. As part of their strategy and to keep the Ponzi scheme alive, they manipulated token prices and introduced new assets.
In 2018, Subhash Sharma, along with the other participants, launched a crypto-focused multi-level marketing (MLM) scheme. Later, the platform was moved to foreign servers and operated through domains such as korvio.io and voscrow.com to expand its reach. The ED further added,
“He [Subhash Sharma] developed and controlled these platforms, managed cryptocurrency wallets, supervised the migration of investors across platforms, routed investor funds, facilitated the conversion of cash into cryptocurrencies, and exercised overall control over the technical and financial operations of the fraudulent schemes.”
The investigators also alleged that the accused have earned a large number of commissions from the scheme. They reportedly used the proceeds to invest in tangible properties and real estate. Further, the group destroyed the digital records and domain data to conceal the Ponzi scheme.
India Expands Enforcement Against Crypto Fraud
Notably, the latest arrest in the crypto scam is part of India’s broader efforts to crack down on similar fraud in the country. The investigative agencies like the ED and CBI have been taking initiatives to trace and punish individuals involved in Ponzi operations and financial fraud.
One of the latest examples is the ED’s seizure of about $348k worth of cryptocurrencies connected to an online investment scam. In addition to the crypto funds, the investigation team has also confiscated around $15k in cash and frozen bank accounts holding more than $40k.
Additionally, the Indian authorities have also identified about 20,507 suspected mule bank accounts allegedly used to launder around $2.2 million in stolen funds in a crypto scam. Officials described it as one of the largest money laundering networks in the country.
Related: India Moves Toward Broader Crypto Regulation Beyond Tax Rules
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