ED arrests firm director in connection with Rs 1200 crore crypto fraud case

The Enforcement Directorate has arrested a director of a firm in connection with the Rs 1,200-crore fake cryptocurrency racket.

The Enforcement Directorate (ED) has arrested Abdul Gafoor, director of Stox Global Brokers Private Limited, in connection with the probe into the Rs 1,200-crore fake cryptocurrency racket.

The agency initiated the money laundering case last year after the police in Kannur and Malappuram districts registered several cases against K Nishad and others under Section 420 (Cheating) of IPC. The agency has identified K Nishad as the main accused, who cheated several investors by accepting investments, under a Ponzi scheme, through his three Bengaluru based firms-- Long Reach Global, Long Reach Technologies, and Morris Trading.

Nishad allegedly offered high returns of dividend such as 3 per cent to 5 per cent per day.

Investigation by ED revealed that Nishad had appointed those persons as pin stockist, who had invested a minimum of Rs.10 lakhs in his scheme, promising that he would give them 5 per cent as commission on the investment. The accused made aggressive enrolment of new members into an illegal money circulation scheme under the garb of multi-level marketing. They allegedly resorted to the fraudulent practice of investing the money received from the investors in the Morris Coin Cryptocurrency plan run by Nishad and others.

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During the investigation, it was revealed that Abdul Gafoor is one of the main pin stockists of the Morris Coin Scheme, who had facilitated the placement and layering of the proceeds of crime. However, Abdul Gafoor was reportedly not co-operating with the investigation and was very evasive in his replies to the queries.

Abdul Gafoor was placed under arrest on March 24. He was produced before the court on March 25. The court has granted ED custody of the accused till March 31.