Mumbai: The Enforcement Directorate (ED) headquarter carried out search operations in Delhi, Mumbai and Jaipur in connection with a Rs 600-crore cryptocurrency conversion racket. The searches were conducted on February 20, under the Foreign Exchange Management Act (FEMA), 1999, at multiple premises suspected of crypto conversion and facilitating illegal fund transfers through Indian crypto exchanges, the central agency said on Monday.

The ED initiated an investigation based on a newspaper report revealing that Chirag Tomar, an Indian national, is serving a prison sentence in the United States for defrauding victims of over $20 million through fake or spoofed websites mimicking the cryptocurrency exchange platform Coinbase. Tomar and his associates created a fraudulent website, CoinbasePro.com, which closely resembled the legitimate Pro.Coinbase.com.

Unsuspecting users, after entering their login credentials, were misled into believing there was an error. When they contacted the customer support number displayed on the spoofed website, they were redirected to a call center operated by Tomar. Once fraudsters gained access to victims' accounts, they swiftly transferred cryptocurrency holdings to wallets under their control. The stolen digital assets were then sold on LocalBitcoins.com and converted to INR through Indian crypto exchanges.

The illicit operations reportedly generated Rs 15 crore, with a portion of the funds traced to Tomar's family. The ED froze several bank accounts linked to his family members, and the amount frozen so far stands at Rs 2.18 crore

According to ED, it was revealed that similar fraudulent transactions involving the sale of dubious cryptocurrency and its conversion to INR were uncovered during the raids. Further investigations are underway to identify additional beneficiaries and money trails.

Tomar was arrested by the US authorities in December 2023 at Atlanta Airport upon entering the country. On May 20, 2024, he pleaded guilty to wire fraud conspiracy and was placed in the custody of the Federal Bureau of Prisons.