India’s Enforcement Directorate (ED) has cracked down on a massive Ponzi scheme involving cryptocurrency operations linked to HR Crypto Coin, leading to significant asset seizures and the freezing of numerous accounts.
ED Cracks Down on Highrich Online and HR Crypto Coin
On June 11, the ED’s Kochi Zonal Office conducted search operations at 14 locations across Kerala, Maharashtra, and Chhattisgarh. These raids targeted the premises of promoters and leaders of the Highrich Online Group under the Prevention of Money Laundering Act (PMLA), 2002.
Ponzi Scheme Details
The ED discovered that the Highrich Online Group, along with its promoters and leaders, were involved in cryptocurrency trading on several exchanges and selling their own digital currency, HR Crypto Coin. This cryptocurrency was marketed in exchange for Indian Rupees (INR) and Tether (USDT). The scheme lured investors by promising an annual interest rate of 15% and offering a 30% direct referral income for introducing new customers.
Operation and Uncovering
The investigation by the ED was initiated following a first information report (FIR) filed by the Kerala Police and numerous complaints against Highrich Group and its directors. The company was found to be selling memberships as digital IDs, providing user credentials to access their website for a fee. Members then sold these memberships to others to earn commissions, with additional incentives for referring new members. The scheme, lacking any real underlying business, was identified as a classic Ponzi scheme.
Seized Assets
The raids resulted in the freezing of approximately Rs. 32 crore ($3.9 million) in various bank accounts associated with the company, its promoters, and their families. Authorities also seized around Rs. 70 lakh ($85,365) in cash, jewelry, and four vehicles. Additionally, immovable properties worth Rs. 15 crore, acquired through illicit funds, were uncovered.
Also Read: Indian Court Grants Bail, Declares Crypto Trading Not Inherently Illegal
Previous Operations
In January, the ED had conducted similar searches at the premises of Highrich Smartech Pvt. Ltd., Highrich Online Shoppe Pvt. Ltd., and related entities. These operations uncovered Rs. 212 crore in illicit funds, which were subsequently frozen under the PMLA. To date, the total proceeds of crime seized or frozen amount to Rs. 260 crore, including immovable property documents.
