India’s ED Targets Decade-Long Crypto Ponzi Scheme in 21-Location Raid

India's Enforcement Directorate (ED) has launched a significant operation against a decade-long cryptocurrency Ponzi scheme linked to 4th Bloc Consultants. This extensive raid, covering 21 locations across multiple states, is aimed at dismantling an organization that has reportedly defrauded investors in India and abroad. The illicit activities included money laundering and the use of fake investment platforms mimicking legitimate crypto exchanges.

Key Takeaways

Raid Operations: The ED executed coordinated raids at 21 sites associated with 4th Bloc Consultants across Karnataka, Maharashtra, and Delhi.
Allegations: The organization is accused of running a long-term Ponzi scheme, defrauding investors through fake cryptocurrency platforms.
Methods of Fraud: The scheme operated using fictitious platforms and paid initial returns to attract more investors while laundering funds through complex networks.
Ongoing Investigation: Authorities are continuing to analyze seized evidence to uncover the full extent of the operation and recover losses for victims.

India’s Enforcement Directorate (ED) recently carried out raids at 21 locations across Karnataka, Maharashtra, and Delhi on December 18, targeting 4th Bloc Consultants. This organization is accused of orchestrating a decade-long cryptocurrency fraud scheme under the Prevention of Money Laundering Act (PMLA) and is believed to have laundered funds through various means, such as digital wallets, shell companies, hawala transactions, and foreign accounts.

The ED's investigation began following a complaint from the Karnataka state police. The agency claims that the accused utilized fictitious investment platforms designed to mimic reputable global cryptocurrency exchanges, featuring personal dashboards with real-time balances and transaction histories. However, investigators found that genuine market transactions did not occur behind these interfaces.

Describing the operation as a Ponzi scheme or multi-level marketing model, the ED reports that funds from users were allegedly funneled through the organization. To boost credibility, the group reportedly used images of well-known cryptocurrency personalities and public figures without their permission, creating fake testimonials to entice new investors.

According to the findings, the scheme initially paid small returns to early investors, gaining their trust before prompting them to invest larger sums and recruit additional members in exchange for referral bonuses. The group expanded its reach by leveraging social media platforms like Facebook, Instagram, WhatsApp, and Telegram to connect with potential investors worldwide.

The ED revealed that the seized funds, classified as proceeds of crime, were distributed through a complicated concealment system, which involved multiple cryptocurrency wallets to obscure and divide funds, as well as hawala transactions and paper companies. Authorities discovered numerous digital wallet addresses during the raids and confiscated assets, both movable and immovable, purchased with these allegedly gained proceeds across India and abroad.

The investigative efforts suggest that this operation dates back to at least 2015, with the promoters of 4th Bloc Consultants continuously altering their tactics to evade detection as cryptocurrency regulations changed over the years. The ED has stated that ongoing analysis of seized servers and devices is being conducted, with the intent to unravel the network of foreign entities involved and recover funds to reimburse victims.

India’s ED raids 4th Bloc-linked fake crypto investment network.