Enforcement Directorate Seizes Assets Worth INR 36.6 Cr In Crypto Scam

The Enforcement Directorate (ED) has seized assets worth INR 36.7 Cr ($5 Mn) from Nishad K, MD and his associates under the Prevention of Money Laundering Act (PMLA), 2002 in connection with the INR 1200 Cr (162 Mn) Morris Coin cryptocurrency cheating case.

This includes cryptocurrencies worth Ether (5.92387265), BTC (0.08267646), BNB (5.51232875), YFI (0.023062), VET (4284.4), ADA (226.479601), USDT (35.88576551) valued at INR 25,82,794 ($33.7k) purchased out of the proceeds of the crime. The ED converted all these into INR and attached them. 

In this regard, the crypto currencies such as Ethereum (5.92387265), BTC (0.08267646), BNB (5.51232875), YFI (0.023062), VET (4284.4), ADA (226.479601), USDT (35.88576551) total valued at INR 25,82,794 were found and all the above crypto currencies, purchased out of the proceeds of crime, were converted into INR and attached by the ED. 

The ED initiated money laundering investigations on the basis of multiple first information reports (FIRs) registered by the Kerala Police in various districts of the state including Malappuram and Kannur. According to the FIRS, more than 900 investors were duped of INR 1200 Cr.

The scam involved a nonexistent cryptocurrency called Morris Coin. Nishad and his associates conducted a supposed initial coin offering for it and collected money from ‘investors’. These investments were received through various companies owned by Nishad including M/s Long Rich Global, M/s Long Rich Technologies and M/s Morris Trading Solutions.

The money was then used to purchase immovable properties— cryptocurrencies, luxury hotels, resorts and cars. The founder of Morris Coin, Nishad (who hails from the district of Malappuram in Kerala) was arrested in October as part of a similar scam.

Inc42 had reported on a connected story when four persons were arrested in Kerala’s Kannur district for allegedly running a Ponzi scheme masked as a cryptocurrency investment scheme. The Kannur Police had named Mohammed Riyas and four others in the scam.

The accused initially began the scam as a run-of-the-mill Ponzi scheme where they promised investors daily returns of 1%-2% if they invest in Bengaluru-based ‘Longrich Technologies’.

After that, they began paying older investors with the money they got from new investors– this information surfaced quickly and they were able to get more ‘investors’ on board. Just as it happens with almost all ponzi schemes, they were soon unable to find new victims whose money could be used to pay off older investors.

When victims of the scam began raising questions about their money, the group offered to return their investments in the form of a cryptocurrency called Morris Coin. This was a full month after Nishad was arrested.