ED conducts searches, arrests two in Rs 40 cr cryptocurrency fraud case

Chennai : The Enforcement Directorate’s (ED) Chennai Zonal Office conducted search operations under the Prevention of Money Laundering Act (PMLA), 2002, at 11 premises located in Chennai, Coimbatore and Kolkata in connection with a money-laundering investigation into the Hashpe cryptocurrency fraud case, the central agency said on Friday in a press statement.

The ED probe was initiated on the basis of an FIR (First Information Report) registered by the Puducherry Cyber Crime Police against unidentified persons. Investigation revealed that Hitesh Kumar, Imran Basha and Syed Usman alias Babu, in connivance with their associates, had floated a fraudulent investment scheme under the name “Hashpe”.

The platform was projected as a cryptocurrency trading venture, and members of the public were dishonestly induced to invest their funds on the false promise of lucrative returns through trading in a purported cryptocurrency named “TCX”.

According to the ED, the modus operandi involved organising lavish promotional events, engaging Bollywood celebrities and running extensive social-media campaigns to attract investors. The purported value of the Hashpe token was artificially inflated to induce further investments.

Subsequently, investor withdrawals were blocked, and the funds collected were diverted to bank accounts linked to shell entities, associates and relatives of the accused. As a result, investors were deprived of both their invested capital and the promised returns, the ED said. Analysis of bank accounts showed that the accused had collected around Rs 40 crore through these activities. The funds were further diverted and layered for money-laundering purposes.

A substantial portion of the investors’ money was transferred to the personal bank accounts of Imran Basha and Hitesh Kumar, as well as to business entities associated with them and their family members. The proceeds of crime were utilised to fund lavish lifestyles and to acquire immovable properties. The investigation established the roles of Imran Basha and Hitesh Kumar as key accused in the money-laundering activities connected with the Hashpe fraud.

During the searches, incriminating documents and digital evidence relating to the offence of money laundering were seized. Imran Basha and Hitesh Kumar were arrested under Section 19 of the PMLA, 2002, on September 3, and produced before the Special Court (PMLA).

The court granted five days’ custody of both the accused persons. Further investigation is under progress, the ED added.

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