Crypto Wallets under ED Radar: PMLA Probe Reveals ₹4.81 Cr USDT Routed via CoinDCX through Non-KYC Accounts
ED’s money trail analysis revealed that proceeds of crime worth ₹285 crore were layered across more than 100 bank accounts.
The Hyderabad Zonal Office of the Directorate of Enforcement has provisionally attached bank balances totalling ₹8.46 crore spread across 92 bank accounts, including that of CoinDCX and several crypto wallets, under the provisions of the Preventionof Money Laundering Act, 2002 (PMLA) in connection with a massive cyber fraud case involving fake e-commerce and money-making mobile applications targeting gullible individuals through WhatsApp and Telegram.
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ED rolled out the investigation after multiple FIRs were registered by the Kadapa Police under Section 420 of the Indian Penal Code, 1860 and Sections 66-C and 66-D of the Information Technology Act, 2000 against unidentified cyber fraudsters.
Further inquiries across various states revealed a wide network of scams run through deceptive online job schemes and fraudulent investment applications, including the NBC App, Power Bank App, HPZ Token, RCC App among others.
As per the ED, the fraudsters targeted unsuspecting individuals through WhatsApp and Telegram groups, promising quick profits and high commissions. Victims were lured into depositing funds in app wallets under the guise of performing simple online tasks such as buying or selling goods.
Much like similar scams, the miscreants initially credited small profits to the targets to gain their trust, following which larger deposits were solicited. Once significant sums were collected, users were denied withdrawals, the fraudulent scheme crashed and websites became inaccessible, user accounts were deactivated and customer support became non-existent.
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ED’s money trail analysis revealed that proceeds of crime worth ₹285 crore were layered across more than 100 bank accounts, each of which were operated briefly to evade detection before transfers were routed into cryptocurrency or hawala channels.
A crucial finding in the probe was that the scamsters converted ₹4.81 crore worth of USDT (Tether) through CoinDCX using non-KYC compliant user accounts and unverified third-party payments. A press release by ED clarified that sellers on multiple exchanges, including WazirX, Buyhatke and CoinDCX had sold USDT to the fraudsters in peer-to-peer transactions and accepted third-party transfers sourced from illicit funds.
The ED emphasized that the attachments are provisional and form part of an ongoing investigation under the PMLA aimed at tracing proceeds of cybercrime that were laundered through digital currency channels.
Rise of Digital Financial Crimes in India
India’s rapid digitisation has brought immense opportunities but also new vulnerabilities. Millions of first-time internet users find themselves amidst a thriving fintech ecosystem which are manipulated by cyber-fraud networks that increasingly exploit online payment systems and crypto platforms.
Authorities such as the Enforcement Directorate, the Reserve Bank of India and state cyber cells have intensified coordination to trace illicit digital flows and protect consumers in this digital fin-scape.
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