In a significant crackdown on a cryptocurrency-related scam, the Enforcement Directorate (ED), India’s law enforcement agency, has seized crypto assets worth around $10.5 million (₹90 crore) from an online gaming app called ‘E-Nuggets’.
The ED’s investigation uncovered a sophisticated scheme where the app promised users lucrative returns on investments through real-money gaming and wagering but ultimately disappeared after collecting funds.
TLDR
- The Enforcement Directorate (ED), an Indian law enforcement agency, seized crypto assets worth around $10.5 million from an online scam app called E-Nuggets.
- The ED collaborated with crypto exchanges like Binance, ZebPay, and WazirX to track and freeze the funds linked to the E-Nuggets scam app.
- The E-Nuggets app allegedly promised users high returns on investments through real-money gaming and wagering but disappeared after collecting funds.
- The ED identified around 2,500 dummy bank accounts and seized cash worth around $2.2 million in the case.
- The alleged mastermind behind the scam, Aamir Khan, and his accomplice Romen Agarwal have been arrested and are currently in judicial custody.
The ED’s operation was a collaborative effort with major cryptocurrency exchanges like Binance, ZebPay, and WazirX. The agency managed to track the funds linked to the E-Nuggets scam to different crypto wallets and accounts maintained on these platforms.
With the cooperation of the exchanges, the ED successfully froze and transferred the crypto assets worth around $10.5 million from 70 different accounts to its own crypto wallet.
According to the ED’s allegations, the E-Nuggets app presented itself as a legitimate gaming platform but was actually a front for a massive financial fraud.
The app offered a series of enticing games that promised users hefty commissions and depicted a golden investment opportunity. However, once users invested their money, the app went dark, leaving them stranded without any means to reclaim their funds.
ED, Kolkata led a successful operation against a major “online gaming app scam” known as “E-Nugget”. The E-Nugget app, masqueraded as a gaming platform, promised users high returns on their investments. Crypto assets which were taken into possession of ED are transferred into…
— ED (@dir_ed) April 30, 2024
The investigation into the E-Nuggets scam began in 2022 when the ED discovered that a portion of the ill-gotten gains from the scheme had been invested in digital assets.
This led the agency to identify and analyze around 2,500 mule or dummy bank accounts linked to the scam. Subsequent searches and seizures resulted in the recovery of cash worth around $2.2 million (₹19 crore).
The ED’s investigation has led to the arrest of the alleged mastermind behind the scam, Aamir Khan, and his accomplice, Romen Agarwal. Both individuals are currently in judicial custody.
The agency has also attached and seized properties worth more than $19.5 million (₹163 crore), including cash, cryptocurrencies, account balances, and office space.
The E-Nuggets case highlights the growing concern around cryptocurrency-related scams and the need for increased vigilance and regulation. While the decentralized nature of cryptocurrencies offers advantages in terms of transparency and traceability, it can also be exploited by bad actors for illicit activities.
This case also demonstrates the effectiveness of collaboration between law enforcement agencies and cryptocurrency exchanges in combating financial crimes.
By working together and leveraging the inherent transparency of blockchain technology, authorities were able to track and seize the funds linked to the E-Nuggets scam.
