An Enforcement Directorate investigation into a cryptocurrency racket has identified five companies engaged in money laundering from Dubai to India. The money exchange firm Zanmai Labs Pvt Ltd, known as WazirX, is one of the five companies involved and under scrutiny. FPJ has obtained information from senior ED officers, revealing how these five companies discreetly laundered money.
ED investigation reveals cryptocurrency invested in Dubai
Initially, cryptocurrency was invested in properties in Dubai and then cleverly transferred to India, thereby leaving no trace of the money laundering during the transactions. To facilitate this operation, these companies collaborated with foreign exchange operators and tour agents to collect data from thousands of passports. These passport details were then utilised for the companies’ operations. According to a senior ED officer, the ED investigation revealed that cryptocurrency had been invested in properties in Dubai.
These funds were then received by associated companies within the syndicate, in the form of assets in Dubai. With the assistance of foreign exchange operators and tour agents, data from thousands of passports was collected and used by these suspected companies. The crypto funds were then transferred as travel remittances, to convert them back into Indian currency. Travel remittance is a non-commercial transfer of money by foreign workers, diaspora members, or citizens with familial ties abroad, to support household income in their home country or homeland.
ED explains modus operandi
It is used for money laundering without the knowledge of the accountholder. Explaining the modus operandi, senior ED officers said that previously, investments would be made in properties in India in exchange for gold. However, these companies have now shifted to investing in properties in Dubai using cryptocurrency. This change in approach is due to the fact that in countries such as the United States, only small transactions are allowed, while these operations involve transactions of thousands of crores of rupees.
In August, the minister of state for finance, Pankaj Chaudhary, had mentioned in Parliament that the ED was investigating several cases related to cryptocurrency or virtual digital currency frauds, with a few crypto exchanges also found to be involved in money laundering. By then, 20 individuals had been arrested, and `1,144.5 crore had been seized or frozen as criminal proceeds in connection with cryptocurrency frauds.