CBI busts Rs 350 crore nationwide crypto Ponzi scam, raids seven locations

The CBI has conducted search operations across seven locations after registering a case of Rs 350 crore crypto ponzi scam against seven persons, officials said Friday.

The accused persons were allegedly running seven separate modules based in the cities of Delhi, Hazaribag, Bathinda, Ratlam, Valsad, Pudukkottai and Chittorgarh, taking money from gullible investors promising investments in cryptocurrencies, they said.

"These ponzi schemes were being promoted through multiple social media groups. An analysis of bank account transactions and cryptocurrency wallets has revealed that the illegal proceeds from these schemes were being converted into cryptocurrencies to obscure their origin," CBI's spokesperson said in a statement.

It is alleged that they had conducted transactions of over Rs 350 crore in these schemes, the officials said.

On Thursday, the agency swooped down at locations in Delhi, Jharkhand, Punjab, Madhya Pradesh, Gujarat, Tamil Nadu and Rajasthan.

During the searches, the CBI seized digital virtual assets totalling USD 38,414 (approximately) in the cryptocurrency wallets of the accused persons, which had been digitally secured for investigation.

"The searches resulted in the recovery of cash amounting to 34.2 lakh(approx), along with significant digital evidence, including seven mobile phones, one laptop, one tablet, three hard disks, 10 pen drives, memory cards, SIM cards, ATM/debit cards, email accounts, and several incriminating documents," the statement said.

The agency registered the case under Indian Penal Code section 120-B (criminal conspiracy), read with Section 420 (cheating) and Section 66D of the Information Technology Act, 2000, because it was part of an ongoing investigation that predated the introduction of three new criminal laws last year.

"It was alleged that accused persons, acting in criminal conspiracy, have been actively floating various ponzi and fraudulent schemes, promising high returns based on cryptocurrency investments. They are also accused of promoting, promising, and disseminating false and deceptive information to entice investors into these unregulated deposit schemes, which operate without requisite approvals from regulatory authorities such as the Reserve Bank of India (RBI)," the statement said.

The probe has uncovered multiple bank accounts and Virtual Digital Asset (VDA) wallets with cryptocurrency exchanges, including CoinDCX, WazirX, Zebpay, and BitBns, held by the accused members.

"Over two years, these accounts and wallets witnessed transactions exceeding ?350 crore. The victims were allegedly defrauded by the accused under various pretences, such as online loans, online lucky orders, UPI frauds, and internet banking scams," the CBI said.