Indian Authority Bust ‘E-Nugget’ App Scam with Binance

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As a researcher with a background in digital forensics and financial crimes, I’m deeply intrigued by this case involving the Enforcement Directorate (ED) and the online scam app, E-Nuggets. The scale of the operation and the involvement of major crypto exchanges like Binance, ZebPay, and WazirX make it a significant one in the world of digital assets.

The Enforcement Directorate (ED) has obtained approximately 90 crores ($10.5 million) by seizing funds from the fraudulent online app E-Nuggets. Notable crypto exchanges, including Binance, ZebPay, and WazirX, provided significant aid in this process.

I recently came across a disturbing report by The Hindu about an online gaming app named E-Nugget. Contrary to its apparent purpose, this platform was found to have hidden away cryptocurrencies valued at approximately $10 million in no less than 70 different crypto wallets spread out across various exchanges.

The principal online gaming app, “I-Negative,” was successfully challenged by Kolkata, with the Electronic Governance (EEE) taking the lead. The I-Negative apps presented themselves as gaming platforms, but they promised high returns to users on their investments. Later, EEE unveiled…

— ED (@dir_ed) May 2, 2024

The ED took prompt action, reaching out to the exchanges to halt transactions on suspicious wallet addresses and move the unlawfully obtained cryptocurrencies to their own secure wallet. The E-Nugget application operated with finesse, attracting users with lucrative investment returns presented as a gaming platform.

The agency’s actions didn’t end with the crackdown. They confiscated assets worth more than 163 crores ($19.5 million): this included cash, cryptocurrencies, savings in accounts, and rented office spaces.

Back in 2022, this story took its start when red flags emerged regarding the app’s involvement with digital assets, leading to initial suspicions. The Enforcement Directorate’s probe subsequently revealed an astonishing discovery: approximately 2,500 fake bank accounts and a hidden cache of around 19 crores, equivalent to $2.2 million in cash.

Aamir Khan and Romen Agarwal, the accused masterminds, have been taken into custody after their illicit scheme was uncovered through the use of blockchain technology. Despite the involvement of digital assets in their alleged transactions, law enforcement were able to trace, freeze, and seize the funds. These incidents serve as a reminder of the transparency offered by blockchain technology, debunking criticisms that it facilitates money laundering schemes.

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2024-05-02 15:48