India’s ED arrests Crypto trader in Chinese online betting scam and Hawala activities

India's ED has arrested Naisar Kothari, a crypto-currency trader for his alleged involvement in a multi-crore online betting scam.

By · Dec 14, 2020 . 6min read

Indian Crypto trader betting scam

The Enforcement Directorate (ED) arrests a crypto trader owing to its money laundering inquiry to an online Chinese betting scam case. The central agency said that Naisar Kothari, a resident of Bhavnagar Gujarat was accountable for a scam of over Rs 1,100 crore. The ED arrests Naisar Kothari under sections of the Prevention of Money Laundering Act (PMLA). Moreover, he has been sent to the ED (Enforcement Directorate) custody till December 22 by a court. 

The case gained limelight post carrying out various raids across the country in August. It took place at the registered offices of their companies, their directors, and the Chartered accountants. They were under the radar for involvement in illegally operating online betting apps on websites operational outside India, and some Chinese nationals operated them.  

Two Chinese Companies accountable for Chinese Online Betting Scam

According to the reports, the scam charged two Chinese-based companies, particularly M/s Linkyun Technology Private Limited and M/s Dokypay Pvt Ltd under section 420, 120 B of Indian Penal code and Section 3 (1) of Telangana state gambling Act 2017. Blamed companies hovered a significant number of similar websites operational via Cloudfare, USA. These websites lured innocent persons into taking part and placing bets on several online apps. The apps guaranteed attractive rewards on uncomplicated games of chance. Moreover, they hired a network of agents to draw new consumers or members. These agents developed private Telegram & WhatsApp based groups and drew lakhs of gullible Indians. Moreover, they used referral codes to attract new members.

Thus, this helped the sponsoring member to receive a commission. The accused companies made use of Paytm and Cashfree to collect money. Moreover, to also provide a commission to all these agent members. They produced websites in bulk to promote online betting under e-commerce shadow. However, they did not activate the sites altogether. They used some sites for placing bets.

According to the reports, the transmission of the login credentials and dongles for HSBC Bank accounts and payment aggregators such as Paytm, Cashfree, Razorpay, etc. to China. Moreover, three persons, involving one Chinese national, were detained earlier in this case. The ED alleged that Kothari had consciously and actively committed himself to layer the proceeds of crime. Subsequent investigation reveals that besides rendering payment aggregator re-seller help to forbidden apps in India, these Chinese Companies were luxuriating in International hawala and illegal activities.

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