India arrests suspect over $1.1M crypto laundering scheme

Indian authorities have apprehended a man for laundering more than $1 million (Rs. 10 crore) in digital assets to a Pakistan-based digital asset wallet. The suspect, Chetan Gangani, was arrested by operatives for his involvement in a cybercrime operation that funneled funds to the digital wallet.

According to authorities, the arrest is part of an ongoing effort to crack down on mule bank accounts. Cybercriminals use mule bank accounts to move criminal proceeds, using multiple accounts in most cases, so they can obfuscate the origin and destination of the funds. In most cases, these usually happen before the funds are moved out of the country through digital wallets or by any other means. However, in this case, the suspect tried to move the funds out of the country using a digital wallet.

Indian police arrest a suspect for money laundering

According to the Indian police, the suspect was affiliated with six other arrested persons. While his arrest was recent, the others had been apprehended on November 3 as part of a string operation by authorities in the region. The operation spanned locations like Morbi, Surendranagar, Surat, and Amreli districts. The group was accused of allegedly routing Rs. 200 crore to criminals based in Dubai using more than 100 mule accounts.

The police claimed that the Indian national allegedly helped the gang members convert Rs. Crore into different digital assets or USDT and then sent it to the digital wallet based in Pakistan. Gangani used his BitGet crypto wallet to send the money, using the application to send funds for over four months. Officials claimed that the Pakistan-based wallet receiving the funds had a balance of Rs. 29 crore, of which Rs. 10 crore was from Gujarat.

The police mentioned that the criminals gave him a commission of 0.10% on every USDT he sent to the wallet. They alleged that the other persons held in connection with the crime also provided more than 100 mule accounts to the cybercriminals, limiting their operations to Gujarat. They claimed that the accounts were used in 386 cases, including digital arrests, task frauds, investment frauds, loan frauds, and part-time job scams.

Police dismantle fraud network

Speaking about the arrest, Harsh Sanghavi, deputy chief minister of Gujarat, mentioned that the CID crime division had cracked down on a major cross-border cybercrime network. “In a major breakthrough, the Gujarat Cyber Crime Center of Excellence has dismantled a large-scale ‘Mule Account’ network operating across multiple districts, including Morbi, Surendranagar, Surat, and Savarkundla, with direct financial links traced to Pakistan,” he said in his statement.

Sanghavi mentioned that the cybercrime division of the Indian police carefully tracked the money trails through several layers. He mentioned that the criminals were smart, but the division was able to discover the Indian accounts that the funds originated from, linking them to the USDT transactions. “The probe revealed the transfer of Rs. 10 crore to a Pakistani Binance USDT account, which has accumulated over Rs. 25 crore from Indian accounts and this gang being one of the major sources,” he added.

Over the past few months, residents and stakeholders have called on the government, seeking clarity on how it intends to regulate digital assets. The amount of illicit activities being carried out in the space has increased in that time frame, with these criminals targeting innocent citizens. To curb these illicit activities, India would need to move swiftly to create regulations that would safeguard investors in the crypto market, giving them a safe space to carry out their activities.