One person has been detained in a case involving a crypto scam worth Rs 1,200 crore in Kerala.
One of the main suspects in the Rs 1,200-crore fake cryptocurrency fraud unearthed by the Enforcement Directorate in January has been arrested.
Abdul Gafoor, a Malappuram resident, has been placed in judicial custody by a PMLA (Prevention of Money Laundering Act) court in Kozhikode, according to ED sources.
On Monday, the central agency would file a motion in court seeking his detention for interrogation, according to the sources.
Gafoor is the director of Stox Global Brokers Private Limited, a Malappuram-based inactive entity (shell company), according to ED sources. They claimed he was actively involved in allegedly syphoning money from customers who were duped into believing they were getting a good deal on crypto investments and then hiding it in shell businesses.
K Nishad, who fled the country after the racket was discovered, was previously identified by the ED as the leader of the scheme that reportedly defrauded around 900 investors. The ED then took possession of his Malappuram properties.
The money laundering case was taken up by the agency last year after police in Kannur and Malappuram districts filed various cases against Nishad and others under the Indian Penal Code's Section 420 (Cheating) and the Prize Money Laundering Act.
According to ED sources, the alleged swindle took place in 2020, particularly during the Covid lockout period. The accused victims were forced to purchase a non-existent crypto currency named "Morris Coin," which was listed on a Coimbatore-based cryptocurrency exchange called "Franc Exchange," in a manner similar to an IPO purchase.
According to ED sources, 10 Morris coins with a lock-in term of 300 days were valued at Rs 15,000 and used in the scam. Investors were given an e-wallet and informed that the coin's value would skyrocket if it was exchanged on the exchange.
However, according to the reports, the coin's founders diverted the money and invested it unlawfully in immovable properties in Kerala, Tamil Nadu, and Karnataka, notably real estate, without disclosing any source of income.