Man Arrested In Crypto Linked Money Laundering Case Worth More Than Rs 1,800 Crore

The Enforcement Directorate on Wednesday said it has arrested a Delhi-based man on money laundering charge as his company allegedly sold cryptocurrencies worth more than Rs 1,800 crore.

Manideep Mago was taken into custody under the Prevention of Money Laundering Act and produced before a special court in Delhi on Tuesday.

The court sent him to ED custody till June 23, the central agency said in a statement.

The ED said it initially booked a case against the company under the Foreign Exchange Management Act (FEMA) and searched its premises "on the basis of source information that a Delhi-based company has sold crypto currencies worth more than Rs 1,858 crore on crypto exchanges." A preliminary investigation found that foreign outward remittances worth more than Rs 3,500 crore were made by the company and its related entities, it said.

Cash deposits of more than Rs 1,300 crore have also been made in the bank accounts of related entities, the ED alleged.

The FEMA search found that an international 'hawala' syndicate has been active in Delhi and was collecting cash from exporters/importers and remitting it to foreign countries against bogus invoices, it said.

This way, the agency said, outward remittances worth more than Rs 3,500 crore have been sent to Canada and Hong Kong against bogus invoices raised for "online lease of GPU servers for crypto mining, educational softwares, lease of bare metal servers." The members of the syndicate incorporated companies in Hong Kong and Canada for facilitating international hawala and has invested heavily in illegal crypto mining and arbitrage trading as part of their operation, it said.

"ED has found evidence of involvement of Chartered Accountants and a few bank officials," the central probe agency said.

The agency also said that bogus and forged invoices were generated in 70,000 random names and entered into the tally database to justify the deposit of cash.

The source of the crypto was not revealed by the accused, it said.

The ED said it shared these FEMA search unearthed inputs with the Delhi Police crime branch, which filed an FIR against the company and others.

Based on this complaint, the agency registered a money laundering case.

Before the ED, Mago was arrested by the Delhi Police.

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