On Friday, the Indian Directorate of Enforcement (ED) conducted raids on at least six premises as part of an investigation into a money laundering case linked to the crypto fraud ring known as Emollient Coin. This operation marked the first-ever raid in the union territory of Ladakh, and extended to parts of the states of Jammu and Kashmir, and Haryana.
The investigation revealed that more than 2,500 investors had deposited over $876,430 into the fraudulent crypto business, Emollient Coin Limited. Instead of returning the money, the accused, identified as AR Mir, allegedly used the funds to purchase real estate in Jammu before dissolving the company.
The case originated from a First Information Report (FIR) filed in March 2020 in the city of Leh, following numerous complaints against AR Mir and Ajay Kumar Choudhary. Emollient Coin was incorporated in 2017 with a registered office in London, under the directorship of Henry Maxwell.
In response to the complaints, a committee established by the local district magistrate conducted an investigation into Mir and his agents. The committee eventually sealed the office, noting that they were “cheating many innocent individuals by assuring them to double their investment.”
According to Tracxn, a startup data platform, Emollient Coin purported to offer a decentralized storage blockchain, utilizing its native coin based on Proof-of-Work and Proof-of-Stake consensus mechanisms for buying and renting storage spaces. ED officials disclosed that the accused enticed individuals to invest in Emollient Coin using cash or bank transfers, promising returns of up to 40% with a lock-in period of 10 months. Additionally, Emollient Coin offered a commission of up to 7% of the investment for referrals, effectively creating a multi-level marketing scheme.
This raid comes at a time when India is already grappling with the aftermath of a massive hack of the crypto exchange WazirX, which resulted in the loss of $234 million. The exchange has reportedly sought assistance from its former partner Binance to help bail out affected customers.
The ED’s actions underscore the ongoing challenges and risks associated with the rapidly evolving crypto market in India, highlighting the need for vigilant oversight and regulatory measures to protect investors from fraudulent schemes.
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