Crackdown on E-Nuggets Scam: ED Seizes $30M Across Crypto Platforms

The Enforcement Directorate (ED) is an Indian law enforcement agency that with the cooperation of Binance, ZebPay, and WazirX crypto exchanges has confiscated 90 crores ($10.5 million) from an app, E-Nuggets, following an online scam.

The e-Nugget is an app for online gaming, through which it held cryptocurrencies worth $10 million in 70 different accounts of crypto wallets across the three crypto exchanges, according to a report published in The Hindu.

The ED, thereafter, contacted these exchanges and requested them to block these wallet addresses and transfer the crypto assets to the wallet of the agency.

In the report, ED has claimed that the E-Nugget app was claiming to offer its customers huge returns in terms of investments while masquerading under the gaming platform.

Very good investment offer in real-money games, whereby other rather attractive games, which offer the investor substantial commissions and are designed for the user to bet on, were rather numerous. As soon as the investment of money was carried out, the application disappeared, leaving investors a fait accompli and not allowing them to receive their funds back.

The agency said it has attached and seized properties valued at over 163 crores, which include cash, cryptocurrency, account balances, and office space.

The scam app first came into the radar in the year 2022 when some of the funds from the company were invested in digital assets. The ED investigation found 2500 dummy bank accounts that are worth 19 crores ($2.2 million) of cash.

His accomplice Romen Agarwal was later on arrested along with the probable mastermind of the plan, Aamir Khan. As of now, both are in police custody.

The money was transferred with crypto; hence, through the action of the law enforcement agencies, the tracing, freezing, and seizure took place.

While critics often make attempts to point at the use of cryptocurrencies for money laundering, the nature of the blockchain makes it literally impossible to launder the money once identified. In most of the cases, the exchanges of such cryptocurrencies either track the funds back or freeze them if they find it is associated with criminal activities.

The flagship example of transparency and the challenging ability to launder funds via digital assets brings us right back to 2016, the year of the hack on Bitfinex. The total number of 119,756 Bitcoins was withdrawn from the exchange. The attackers were actually finally spotted and arrested only in 2022, as they had already begun to launder. CoinTelegraph reached out to Binance and ZebPay for comments but had not received a response by press time.