India’s enforcement agency cooperates with Binance to crack down on fraudulent app.

The Enforcement Directorate (ED) – India's law enforcement agency – seized 90 crore ($10.5 million) from an online fraud app called e-Nuggets with the help of crypto exchanges like Binance, ZebPay and WazirX.

According to a report published by The Hindu, online gaming app E-Nugget has $10 million worth of cryptocurrency stored in 70 different crypto wallet accounts spread across three crypto exchanges.

The ED contacted these exchanges to block wallet addresses and transfer crypto assets to the agency's wallet.

In the report, he alleged that the e-Nugget app was masquerading as a gaming platform and offering huge investment money to its customers.

The application offers a profitable investment opportunity with a number of attractive real money games that offer large commissions and are designed for users to bet on. But, as soon as money was invested, the app went dark, leaving investors stuck and unable to get their money back.

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The agency seized assets worth more than 163 crores ($19.5 million), including cash, cryptocurrency, account balances and office space.

The scam app first came under the radar in 2022 when some of the company's earnings were invested in digital assets. 19 crores ($2.2 million) cash was found in 2,500 dummy bank accounts in the ED investigation.

The alleged mastermind of the scheme, Aamir Khan, was arrested along with his accomplice Roman Agarwal and is currently in jail.

Since the money was being transferred through digital assets, law enforcement agencies were able to trace it and subsequently seize it.

While critics often point to the use of cryptocurrencies for money laundering, the nature of blockchain makes it much harder to launder money once it is discovered. In many cases, crypto exchanges have traced and blocked funds linked to criminal activities.

The most famous example of transparency and why it is difficult to launder funds using digital assets comes from the 2016 Bitfinex hack.

Hackers managed to steal 119,756 Bitcoin (BTC) from a crypto exchange. However, the criminals behind the scam were caught trying to launder the money in 2022 and arrested.

Cointelegraph reached out to Binance and ZebPay for comments but did not receive a response by the time of publication.

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