India’s Multi-State Crypto Crackdown: ED Probes Fake Platforms

India’s (ED) has launched a significant multi-state enforcement action targeting an alleged cryptocurrency-based investment fraud linked to M/s 4th Bloc Consultants & associated entities. Acting under the Prevention of Money-Laundering Act (PMLA), 2002, the ED’s Bangalore Zonal Office conducted coordinated search operations on December 18, 2025, covering 21 residential & office premises across Karnataka, Maharashtra & Delhi.

The operation followed preliminary investigations based on an FIR & intelligence inputs from the Karnataka State Police, which pointed to a large-scale organised financial fraud involving fake crypto investment platforms. According to the ED, these platforms allegedly targeted both Indian citizens & foreign nationals, collecting funds primarily in the form of virtual digital assets.

• Why This Case Matters for India’s Crypto Landscape
• How Trust Was Engineered to Scale the Scheme
• Role of Social Media & Misuse of Public Identities
• Broader Implications for Regulation & Investor Awareness

Why This Case Matters for India’s Crypto Landscape

Unlike isolated crypto scams that rely on single websites or short-lived campaigns, this case stands out for its longevity, geographic spread & operational sophistication. The ED has stated that the alleged modus operandi dates back to 2015, indicating nearly a decade of continuous activity adapting to evolving crypto infrastructure.

For regulators, this reinforces concerns that crypto-enabled fraud is no longer experimental or opportunistic, but increasingly institutionalised & global in scope. According to the ED, the accused allegedly created multiple fake cryptocurrency investment platforms designed to closely resemble legitimate crypto services.

These platforms advertised astronomical returns, often without transparent explanations of trading strategies, risk disclosures, or custody mechanisms. The platforms were allegedly structured to collect funds in crypto rather than fiat, allowing operators to bypass traditional banking scrutiny during the early stages of fund aggregation.

This design significantly reduced friction in onboarding victims, particularly overseas investors already familiar with crypto transfers.

How Trust Was Engineered to Scale the Scheme

A key element of the alleged scheme was trust engineering. The ED noted that early participants were paid limited returns, creating the illusion of a functioning investment model. This approach mirrors classic MLM-style mechanics, where initial payouts serve as marketing tools rather than evidence of genuine profitability.

Referral bonuses reportedly played a major role in scaling the operation. By incentivising users to bring in new participants, the platforms converted victims into promoters, dramatically expanding reach while lowering marketing costs for the operators.

The investigation has uncovered the alleged use of multiple crypto wallets, foreign bank accounts & overseas entities to collect & layer proceeds of crime. According to the ED, crypto funds were utilised directly for transactions wherever possible, or converted into cash & bank balances using peer-to-peer (P2P) crypto transfers through select platforms.

In addition, funds were allegedly routed into India using hawala networks & accommodation entries, demonstrating a hybrid laundering model that combines decentralised crypto rails with long-established informal financial systems.

Role of Social Media & Misuse of Public Identities

Social media platforms including Facebook, Instagram, WhatsApp & Telegram were allegedly used extensively to market the schemes. Investigators stated that the accused misused photos of reputed crypto experts & well-known personalities without consent to lend credibility to their platforms.

This tactic reflects a broader trend in crypto-related fraud, where borrowed authority substitutes for verifiable credentials. In an ecosystem where many users lack deep technical understanding, visual endorsement often becomes a decisive trust signal.

The ED stated that proceeds generated through these schemes were allegedly used to acquire movable & immovable assets in India & abroad. During the search proceedings, investigators identified several such properties, marking a critical step toward potential attachment under PMLA provisions.

Authorities also identified crypto wallet addresses allegedly linked to the accused, which were used to receive & further distribute illicit funds. The presence of undisclosed foreign bank accounts & foreign entities suggests deliberate efforts to obscure beneficial ownership & jurisdictional reach.

The ED has listed more than 25 websites allegedly used to execute the fraud, including domains such as goldbooker[.com], cryptexify[.com], hawkchain[.com], turbominers[.com], primetrades[.com] & metaaibox[.com].

Rather than relying on a single brand, the operators appear to have deployed a distributed network of platforms, reducing dependency on any one domain & allowing rapid substitution if a site attracted scrutiny. This approach reflects a shift toward portfolio-based scam infrastructure, complicating takedown & attribution efforts.

Broader Implications for Regulation & Investor Awareness

This case underscores the limitations of purely platform-centric regulation in a crypto-native fraud environment. Even as exchanges face tighter compliance requirements, off-platform wallets, P2P transfers & offshore entities remain significant blind spots.

For investors, the investigation reinforces a familiar but often ignored lesson: consistent high returns, referral incentives & celebrity-style endorsements are structural red flags, regardless of whether the asset class is crypto or traditional finance.

The Enforcement Directorate has confirmed that further investigation is ongoing, including deeper analysis of financial trails, asset tracing & cross-border fund movements. As authorities map wallet flows & property acquisitions, the case could become a reference point for how India approaches crypto-enabled money laundering under existing legal frameworks.

Source: Official Press Release Issued by Directorate of Enforcement, December 22, 2025.

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