Not just Crypto, even cash was seized from Amir Khan in E-Nugget Gaming case
ED had earlier seized Rs. 17.32 Cr ($2.13M) from Aamir Khan, before freezing 77.62710139 bitcoins at Binance worth Rs. 12.83 Cr on Wednesday. Further investigation is pending.
Update: ED froze another Rs 5.59 crore on October 3, 2022
Update: Earlier on September 30, ED said it froze WRX tokens in WazirX exchange belonging to Amir Khan worth over Rs. 46 lakhs.
As always I try to bring you the information in my newsletters that you would otherwise not have known or perhaps seen from a different perspective. My guess is that most of you are aware of the headlines from yesterday that said,
ED freezes crypto assets worth Rs 12 crore in E-nuggets mobile app case
The official Press release from the Enforcement Directorate said,
Directorate of Enforcement (ED) has freezed the crypto currencies, 77.62710139 Bitcoins [equivalent to USD 1573466 (Rs 12.83 Crore approximately) ] under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, in respect to an investigation being conducted against one Aamir Khan and others relating to the Mobile Gaming Application, namely E-nuggets.
I have already wondered how these PRs use the word Freezed, but the word actually should be frozen. Anyway, moving on…
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Before BTC, it was Cash
ED was investigating Amir(Aamir) Khan, the creator of the E-Nuggets Gaming app, and the agency said the game was designed to defraud people.
ED began the money laundering investigation on the basis of an FIR dated February 15, 2021, under sections 420, 406, 409, 468, 469, 471, 34 of IPC by Park Street Police Station, Kolkata Police, against Aamir Khan & others, based on a complaint filed by Federal Bank authorities, in the court of Ld. Chief Metropolitan Magistrate, Calcutta.
On September 10, 2022, ED shared its finding, around Rs. 7 crores ($860k) cash was found in the house of Amir Khan. On September 11, the total tally of cash found was Rs. 17.32 crore($2.13M). It looked like this.
The investigation continued after this.
On September 28, 2022, the Enforcement Directorate announced that it has frozen 77.62710139 bitcoins [equivalent to USD 1573466 (Rs 12.83 Crore approximately) ] that belong to Amir Khan.
Let’s understand further about this scam.
What is E-Nuggets?
E-Nuggets was a gaming application, launched sometime in 2020 that could be installed on your phone. Like many scams, it prompts the users to deposit money, keep them in the app, earn interest and refer more people to the app to earn more.
Something like this was brought to light earlier with the HPZ Token scam.
The app asked people to deposit money in their app-based wallet and get a certain percentage as a commission. The percentage was kept very high to attract gullible users. Users could also play a slot-like game that gave them gifts that they could encash later in the game itself.
The users were told they can withdraw the funds anytime and for a short period of time, they could do that.
I found a few youtube videos directing users on how to use the app and pushing their referral links for sign-ups. Needless to say, this was a scam from the very beginning.
All withdrawal options were disabled after some time. Even the admin and application details of the server were deleted later. Finally, it was a bank’s FIR that pushed the authorities to take action.
The Crypto Angle
It is estimated to have defrauded around Rs 65-70 Crore from across the country, of which Rs. 17.32 crore was recovered as cash and Rs. 12.83 crores were recovered in bitcoins.
Where did the bitcoins come from?
ED investigation revealed that Amir was transferring part of the amount illegally earned through the gaming app overseas by using a Crypto Exchange.
They created an account in the name of Sima Naskar at WazirX Crypto Exchange. The dummy account in the name of Sima Naskar [Proprietor of M/s Pixal Design) was used to purchase crypto assets, which were then transferred to Binance.
The balance of said transferred crypto assets ie. 77.62710139 bitcoins at the Binance crypto exchange has been frozen.
India is cracking down on Scams
This is the second reported notable scam that used cryptocurrencies this month. It will not be wrong to assume that ED is currently investigating multiple such applications and cons and more and more such seizures and laundered money will be unearthed soon.
The Chinese Loan Apps, HPZ Tokens, and E-nuggets seem to be the beginning of a huge investigation that is unfolding like layers of an onion.
These crack-downs will hopefully educate the masses on how to identify scams and stay away from them while also making scammers be more careful about their shenanigans.
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