Friday, July 19, 2024
HomeLaw & PoliticsIndia's ED Freezes $3.83 Million in Assets Linked to Crypto Ponzi Scheme

India’s ED Freezes $3.83 Million in Assets Linked to Crypto Ponzi Scheme

The Enforcement Directorate (ED) of India is investigating the Highrich online group, including its founders K.D. Prathapan and Sreena Prathapan, for allegedly operating a cryptocurrency Ponzi scheme.

The ED has frozen approximately ₹32 crore ($3.83 million) in cash deposits and other assets linked to the Highrich online group. This action is part of a broader investigation that revealed the group had amassed about ₹1,500 crore ($179.53 million) from investors under false pretenses of high returns and a 15% annual interest rate.

The investigation and subsequent freezing of assets have been ongoing, with significant actions and discoveries reported recently. The total assets frozen or seized since January have reached ₹260 crore ($31.12 million). The investigation and legal actions are taking place in India, with the ED targeting the operations and financial activities of the Highrich group across the country.

The ED’s investigation uncovered that the Highrich Group engaged in illegal cryptocurrency trading and promoted its own cryptocurrency, HR Crypto Coin, as part of a Ponzi scheme. The scheme involved using funds from new investors to pay high returns promised to earlier investors, along with a 30% direct referral income for introducing new customers. The assets frozen include cash in bank accounts and immovable properties linked to the company’s promoters, believed to be acquired from the proceeds of the alleged crimes.

This case is part of a broader concern regarding Ponzi schemes in the global financial market, particularly within the cryptocurrency sector, which has seen similar high-profile cases like Celsius Network and FTX. These incidents highlight the urgent need for robust regulatory measures to prevent fraudulent practices that can severely impact investors and the financial system. The U.S. Securities and Exchange Commission (SEC), along with other global financial regulatory bodies, is increasingly focused on integrating cryptocurrency markets into formal financial regulatory frameworks to protect investors and maintain financial stability.

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