SUMMARY
The ED also seized incriminating documents and 44.5 Bitcoins during the raids at two premises
So far, the agency has seized and frozen assets worth INR 51 Cr in connection with the probe under PMLA in the case
The E-nuggets app was used to lure users to invest money, post which the application would become inaccessible
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Continuing its crackdown, the Enforcement Directorate on Thursday (October 20) conducted fresh search operations at two premises linked with fraudulent gaming app E-nuggets.
During the raids, INR 1.65 Cr worth of cash and other incriminating documents were seized by the agency sleuths. The ED also froze 44.5 Bitcoins amounting to INR 7.12 Cr as part of the ongoing probe into the app under various provisions of the Prevention of Money Laundering Act (PMLA), 2002.
“ED has carried out search operation at 2 premises in Kolkata and seized cash of INR 1.65 Cr, froze 44.5 Bitcoin (equivalent Rs 7.12 Cr) and other incriminating documents under PMLA, in respect to an investigation being conducted relating to the mobile gaming app., namely E-nuggets,” the agency said in a tweet.
Further probe into the matter is currently underway.
The case came to light in February this year after an FIR was lodged on the complaint of Federal Bank authorities in Kolkata against the main accused, Aamir Khan.
Subsequently, in early September, the ED conducted raids at six premises in connection with the probe and seized an amount of INR 17.32 Cr and Bitcoins worth INR 13.56 Cr over the month.
This also included cryptocurrencies such as WazirX’s WRX utility token and USDT parked with exchanges such as Binance.
In addition, the agency also froze an amount of INR 5.47 Cr in the bank account of Khan and his accomplice. So far, INR 51.16 Cr has been seized and frozen in this PMLA case.
The Modus Operandi
The fraud was perpetrated via the gaming app E-nuggets. Describing the modus operandi of the fraud, the ED said that users were lured to invest money in the app, post which, the application would become inaccessible.
“Aamir Khan launched a mobile gaming application namely E-nuggets, which was designed for the purpose of defrauding (the) public. Further, after collecting (a) handsome amount from the public, all of the sudden, the withdrawal from the said app, was stopped, on one pretext or the other,” the ED in a statement.
Post that, all data including the profile information of the victims would be wiped off from the servers of the app and more than 300 accounts were then deployed to launder money across the globe.
The ED has cracked down on apps involved in alleged money laundering over the last few months. The ongoing sweep has involved apps offering digital loans and making false promises of getting high returns in lieu of investment in cryptocurrencies.
In the last few months, a slew of Chinese entities have been raided across the country on apprehensions of operating unauthorised businesses and laundering money. The agency’s actions come at a time when there has been a major uptick in online frauds through which many have been scammed of their life savings.
While the ED has tightened its noose around such companies, the Reserve Bank of India (RBI) has come up with guidelines and advisories urging people to do due diligence before availing such services.
However, cases of digital frauds continue to be reported from across the country due to a lack of regulation and lax enforcement.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.