India’s ED works with FBI to uncover $360m drug trafficking operation using crypto

India’s Enforcement Directorate (ED) has collaborated with authorities in the United States to crack down on an INR 3000 crore (approx $360 million) drug trafficking operation involving cryptocurrencies. 

According to local reports, the ED teamed up with the Federal Bureau of Investigation (FBI) and arrested two individuals involved in the operation. The investigation was initially launched in 2023, but the arrests were made last week following a tip from the FBI to the ED.

The two individuals, Parvinder Singh and Banmeet Singh from Haldwani, in the state of Uttarakhand, were apprehended on April 27 following raids conducted by local law enforcement.

The accused allegedly ran their operations via dark web marketplaces like Silk Road 1, AlphaBay, and Hansa, along with online advertisements to promote the illicit sales of drugs. They even established a network of distributors and distribution cells and facilitated payments via various cryptocurrencies. 

The funds were then laundered via multiple cryptocurrency wallets. 

The FBI has already recovered INR 1500 (approx $180 million) crore worth of digital currencies linked to the case. The ED has also confiscated crucial documents related to the operation.

This isn’t the only illicit operation involving cryptocurrencies uncovered by the ED in April. Per an April 19 report, the ED probed Raj Kundra, a prominent businessman and husband of Bollywood actress Shilpa Shetty, for his alleged involvement in a $800 million Ponzi scheme.

The scheme, dubbed ‘Gain Bitcoin,’ was launched in 2017 and promised investors a return of 10% per month, payable in Bitcoin.

These scams are a part of the growing cases of illicit crypto use in the nation. In March 2024, the ED filed charge sheets against 299 entities under India’s anti-money laundering laws. The charges came in response to fraud involving fake crypto-mining ventures.

To mitigate such risks, the regulators in India have also issued compliance notices to several cryptocurrency exchanges operating in the nation in line with the Prevention of Money Laundering Act (PMLA).