Indian Law Enforcement Authority Busts Scam App with the Help of Binance

India is one the nations with the strictest regulations towards cryptocurrencies. Law enforcement agencies in the region have identified the E-Nuggets scam. This scam is perpetrated through various scam applications that are traced back to different cryptocurrency exchanges as per the investigators.

The investigation has allowed the regulators to seize and recover more than $10.5 million in cryptocurrencies. The Enforcement Directorate (ED) a law enforcement firm operating out of the nation has seized around $10 million in an online scamming app called E-Nuggets in association with cryptocurrency trading platforms such as Binance, WazirX, and ZebPay.

A local media report published in The Hindu noted that E-Nuggets is an online gaming application that stored crypto revenue in 70 different crypto wallet accounts spread across 3 exchanges.

The ED further stated that these exchanges are working on blocking the wallet addresses associated with scammers and transferring crypto to the wallet under the supervision of the regulatory agency.

Indian Law Enforcement Agency to Crack Down Against Scammers

The official account of ED posted an update on social media noting that its Kolkata branch led a successful operation against the scam app called E-Nuggets. The platform was fronted as a gaming application and promised high returns to prospect users after investment.

An incident report filed by ED indicated that the application provided a lucrative investment opportunity with various alluring real-money games with rewards such as commission fees.

The design of the application was created to convince the users to wager. However, as soon as a new account holder invested money the application went dark. In the aftermath the affected user was stuck and unable to recover their investments.

The agency has continued to seize property valued over 163 crores or $19.5 million comprising of cash, crypto, account balances, and office stations.

According to the regulators, the app continued to operate and managed to remain under the radar until two years ago. Some of the funds collected by the scammers were invested to digital assets.

The ED report further revealed that the scammers opened and ran more than two thousand dummy accounts consisting of 19 crores in cash. Authorities have apprehended the main operators namely Amir Khan and his underling Romen Agrawal.

Discovery and Seizure of Scam Applications

The investigative report on the matter published in local media outlets further revealed that investigators were able to trace the illegal activities via digital asset transactions. The discovery allowed the regulators to freeze and seize the illegal funds. There are many cases where critics of cryptocurrencies have deemed it a method for enabling money-laundering.

However, the design of a blockchain makes it impossible to launder funds once a transaction has been identified. On various occasions, crypto trading platforms have successfully traced back the original source of a transaction and freezed funds that were associated with criminal syndicates.

One such example is the Bitfinex hack in 2016 which is considered a testament to the transparency of blockchain and difficulties in laundering money via cryptocurrencies.

In this case, hackers were able to steal around 119,756 Bitcoins from the trading platform. However, cybersecurity experts were able to identify and catch the original culprits which led to arrests when the scammers were caught red-handed while attempting to launder their illegally amassed funds.

FIU Approval

Another important development for Binance in the South Asian nation is the acquisition of FIU approval to resume trading services in India.

A Cointelegraph article confirmed that FIU has reinstated regulatory approval for several crypto exchanges such as Binance and KuCoin. The approval has arrived after a year of ban imposed on the firms in question since December last year.

Vivek Agarwal, the head of FIU, notified that Binance can now operate in the country as a registered trading platform. The same is true for a dozen foreign exchanges that were faced with a non-compliance noticed in December 2023.