India’s Enforcement Directorate (ED) has seized INR 90 Crore (approximately $10.5 million) from a fraudulent online gaming app called E-Nuggets, with the assistance of crypto exchanges Binance, ZebPay, and WazirX.
The app allegedly held cryptocurrencies worth $10 million in 70 different crypto wallets across the three crypto exchanges. The ED approached these exchanges to freeze the wallet addresses and transfer the crypto assets to the agency’s wallet.
In its report, India’s Enforcement Directorate (ED) alleged that the E-Nuggets app was a deliberate attempt to defraud customers by promising high returns on investments, while it was actually a gaming platform.
The app offered investment opportunities with lucrative real-money games but once the money was invested, the app would become unresponsive, leaving investors stranded and unable to withdraw their funds. The ED has seized assets worth over INR 163 Crore (around $19.5 million), including cash, cryptocurrencies, bank balances, and office premises.
The alleged mastermind, Aamir Khan, has been arrested along with his associate Romen Agarwal and is currently in custody. Law enforcement agencies have sought to trace and freeze digital assets as the proceeds of crime were diverted into them.
Despite attempts to launder money using cryptocurrencies, the transparency of the blockchain makes it challenging. Crypto exchanges have often traced and frozen funds linked to criminal activities.
The 2016 Bitfinex hack is a classic example showcasing the transparency and the reason why laundering money with digital assets is difficult.
