India’s ED targets decade-long crypto Ponzi in 21-location raid

India’s ED raided 21 sites tied to 4th Bloc Consultants, alleging a decade-long fake crypto-platform Ponzi that laundered funds via wallets, shell firms, hawala and foreign accounts.

India’s Enforcement Directorate (ED) conducted coordinated raids at 21 locations across Karnataka, Maharashtra and Delhi on Dec. 18, targeting an organization accused of operating a cryptocurrency fraud scheme, according to government statements.

The operation, carried out under the Prevention of Money Laundering Act (PMLA), focused on offices and residences linked to 4th Bloc Consultants and its associates. Investigators allege the scheme defrauded investors in India and abroad over nearly a decade.

According to the ED investigation, which originated from a complaint filed by Karnataka state police, the alleged perpetrators operated through fictitious investment platforms designed to resemble legitimate global cryptocurrency exchanges. The platforms featured personal dashboards, real-time balances and transaction histories, investigators said.

India’s ED raids continue

However, no actual market transactions occurred behind the interface, according to the ED. Investigators described the structure as a Ponzi scheme or multi-level marketing (MLM) model, in which funds paid by users were allegedly laundered through the organization.

The group allegedly used images of known cryptocurrency commentators and public figures without authorization to enhance credibility, according to investigators. These fabricated testimonials reportedly served to attract new investors.

The scheme allegedly paid initial investors small returns to establish trust, according to the ED. Victims were then encouraged to invest larger amounts and recruit new members through referral bonuses. The organization used social media platforms including Facebook, Instagram, WhatsApp and Telegram to expand the network internationally, investigators said.

The ED reported that seized funds, classified as proceeds of crime, were moved through a complex concealment system. This included multiple cryptocurrency wallets used to divide and obscure sums, hawala transactions, paper companies, channels to transfer funds outside regulated banking systems, and undeclared foreign accounts where cryptocurrency was converted to cash through peer-to-peer (P2P) transactions.

Authorities identified numerous digital wallet addresses during the searches and seized movable and immovable assets acquired in India and abroad with alleged proceeds from the activities, according to the ED.

Investigators said the operation allegedly dates back to at least 2015. The promoters of 4th Bloc Consultants adapted their techniques over the years to evade detection as cryptocurrency regulations evolved, according to the ED.

The ED stated that analysis of seized servers and devices continues and the investigation remains ongoing. Authorities said the goal is to map the network of foreign entities involved and recover funds to compensate victims.