Aamir Khan and other participants in the E-nuggets mobile gambling application have been the subject of an ongoing investigation by the Indian Enforcement Directorate, which has resulted in the seizure of $1.5 million worth of cryptocurrency.
Khan, who is presently in police detention, developed the app and sought out public funding, claims the ED. E-nugget users received commissions that they could simply take from the game’s wallet as a reward.
Then, E-nuggets abruptly halted withdrawals before erasing every user’s profile information from the app’s servers.
By the Prevention of Money Laundering Act (PMLA), the ED opened a money-laundering inquiry into Khan on February 15, 2021, in response to a complaint from Federal Bank Limited, a private financial institution with its headquarters in Kochi, a port city.
In India, the ED is in charge of enforcing the law and has access to economic intelligence, and during the past 18 months, it has taken several enforcement actions against cryptocurrency exchanges.
E-Nuggets: What is it?
The online game E-Nuggets was accessible for download. Authorities claim that it pushes users to keep their funds in the application so they may get paid a fee on deposits. They also said that there are other mobile games available on the app that customers may play for real money.
The app requested that users add funds to their app wallets to receive a commission of a particular percentage. The money was then easily transferred to the user’s bank.
According to ED sources, substantial sums of cash were paid to download this software. Even a daily 3 to 4 thousand % commission was allegedly offered as a lure.
There used to be a table where people could engage an internet lottery and maybe earn a lot of money. Unaware clients were first given a sizable incentive based on commission right before they installed the app & started playing. These customers were lured by greed. Their bank accounts would immediately receive that money.
After that, user data and bank statement information were provided to the application developers. All withdrawal possibilities, nevertheless, were eventually blocked. Even the server’s admin and application information were erased. According to ED sources, it is how the scam was executed.
How did it become known?
Amir Khan, whose father is a transport businessman in Kolkata named Nasser Ahmed Khan, developed the “E-Nugget” game software.
The detectives found that Amir’s fraud was practised throughout the nation. There have allegedly been thefts totalling between Rs65 and Rs70 crore, of which Rs17.3 crore so far have been found at Amir’s home.
But how was the fraud discovered?
A fraudulent case was brought to the Park Street police station. The fraud was discovered when federal bank officials filed an FIR against E-Nugget on February 15, 2021, under the Prevention of Money Laundering Act (PMLA), namely sections 420, 406, 409, 468, 469, and 471.
The Kolkata Police are accused of taking no action in this respect. It wasn’t until the Ministry of Finance learned about it and asked the Enforcement Directorate to look into it that it was made practicable.
Cops take business property
The ED claims that Khan has been utilizing two cryptocurrency exchanges to launder money using cryptocurrencies abroad. Khan used the money from the app’s revenue to buy cryptocurrency from WazirX before sending about 78 BTC (or $1.5 million) to Binance. The monies from Binance were later blocked.
The ED also detained four other suspects who provided information such as the location of the company’s office, where they discovered and detained laptops, mobile SIM cards connected to various bank accounts, as well as numerous bank cards in addition to the cryptos.
Additionally, the ED carried out a raid at Khan’s home, where it discovered and confiscated Rs 17.32 Crore (approximately $2.1 million). The ED conducted searches at six locations in Kolkata in September 2022.
Binance responds to claims of AML violations
In India, this study wasn’t the first of its type. The ED opened an inquiry against Binance in June of last year because Chinese citizens were able to use Binance to launder illegal proceeds before sending them to WazirX. Later, it confiscated the bank accounts belonging to one of the directors of WazirX’s operator, Zanmai Lab Private Ltd.
Federal prosecutors from the U.S. asked Binance to provide proof of its anti-money laundering procedures by September 1, 2022, to make sure the firm was not infringing on the Bank Secrecy Act. A spokeswoman for Binance declined to comment at the time on the inquiries made by the Justice Department.
Additionally, Binance refuted a Reuters study, asserting that the company’s expansion was accompanied by lax Know-Your-Customer procedures, a crucial element of anti-money laundering procedures. A 120-person cyber forensics unit with experience working for worldwide law enforcement investigative organizations including the Internal Revenue Service & the Federal Bureau of Investigation, as well as the U.S. Secret Service was allegedly assembled for “tens of millions of dollars” in recruitment costs.
To strengthen our defences against these kinds of fraud and safeguard our users, Binance collaborates with law enforcement, legal authorities, and banks. Additionally, we keep establishing new collaborations with a few of the top specialists in the globe, the business stated in a May 2022 press release.
The following are the main findings of the investigation against Aamir Khan and his associates
- Cash worth Rs 17.32 billion was discovered and confiscated from Aamir Khan’s residence.
- The balance of the Binance Exchange, which was discovered to be 85.91870554 Bitcoins worth USD 16,74,255.7 (about Rs 13.56 Cr at the time, based on market exchange rates), was frozen.
- WazirX Accounts had cryptocurrency worth approximately Rs 47.64 lakhs frozen in them (WRX, a WazirX utility token, and USDT).
- The sum of Rs 5.47 Crore discovered in Aamir Khan & his accomplice’s bank account has been blocked.
- From Romen Agarwal’s residence, authorities seized and froze 1.65 crore rupees in cash and 44.5 bitcoins, which were then worth 7.12 crore rupees.
- Romen Agarwal, who is actively engaged in cross-border and intra-national activities involving the transfer of illegally obtained funds from criminals both inside and outside of countries, was detained. Currently, he is under judicial custody.
During its investigations under the PMLA, the ED has thus far impounded a total of Rs 68.42 crore.
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