Crypto money laundering racket involving Pakistan dismantled in India

A Gurugram accountant in India, a company secretary and two businessmen were arrested Tuesday evening by the Madhya Pradesh police cybercrime cell. The accused had carried out transactions worth 50 crore rupees (approximately $ 6.6 million) as part of a racketeering involving sending money to Pakistan via cryptocurrency.

Yogesh Chaudhary, Additional Director General of Police (ADGP), said Vijay Chhutlani from Mumbai, Vijay Hariyani from Rajkot and an unidentified Chinese national are also involved in the gang.

Cybercell complaint

This case came to light while an investigation into an online fraud valued at 1 crore rupees involving a businessman from Bhopal was underway. The businessman reportedly filed a complaint stating that at the request of a woman he was dating, he had invested in a spice trading company through four different bank accounts.

Apparently, he had met the woman through an online dating site in February 2021.

“The defendants were setting up bogus companies in the name of Indians and depositing the money they had obtained through fraud into the current accounts of these bogus companies or shell companies. They would later transfer the money to Pakistan through an international crypto exchange after converting it to cryptocurrency, ”Chaudhary told PTI.

So far, the police have been able to seize “60 digital signatures of directors of front companies, three laptops, four pen drivers, a cell phone, crypto transaction records, documents related to bogus businesses, Aadhaar and PAN maps of different people. , four checkbooks, a debit card and other documents, ”added the official.

Impact of COVID-19 on Terrorist Financing Using Cryptocurrency

The change in the way financial transactions are conducted in the wake of the pandemic has increased the market for digital assets in the form of cryptocurrencies. Despite the economic crisis across the globe, the crypto world has seen an increase in overall market capitalization. This trend has had its pros and cons with criminals using the digital currency space for activities such as terrorist financing and money laundering.

“Illegal activity and terrorist financing may have increased dramatically as countries continue to fight Covid 19. The model and sources of funding have undergone a massive change due to the stress of the pandemic. This made it very difficult for the authorities to track the quantum or the source of the influx of money, ”BK Singh, retired Delhi Police Joint Commissioner, told India Narrative.

Singh added that since blockchain is unregulated, an increase in the value of bitcoins should be investigated from the perspective of whether or not they are used for illegal purposes.

In fact, a FATF a report from May last year alluded to the use of the unregulated financial sector providing “additional opportunities for criminals to launder illicit funds”.

After the Supreme Court lifted the Reserve Bank of India’s 2018 ban on supporting crypto transactions in the country, investment in the network has boomed. According to some sources, the Indian cryptocurrency wallet investment market has grown from $ 200 million to $ 40 billion in the past year.


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