The Enforcement Directorate has arrested one of the prime accused in the Rs 1,200-crore fake cryptocurrency racket busted by the agency in January this year.
According to ED sources, Abdul Gafoor, a native of Malappuram, has been remanded in judicial custody by a PMLA (Prevention of Money Laundering Act ) court in Kozhikode.
The central agency would move the court seeking his custody for interrogation on Monday, the sources added.
According to ED sources, Gafoor is the director of an inactive firm (shell company), Stox Global Brokers Private Limited, based in Malappuram. They said he had been actively involved in allegedly siphoning money from people who were lured with fake crypto investment offers, and then placing it in shell companies.
The ED had earlier identified K Nishad, who has sneaked out of the country after the racket was busted, as the kingpin of the racket that allegedly cheated around 900 investors. Subsequently, the ED attached his properties in Malappuram.
The agency picked up the money laundering case last year after the police in Kannur and Malappuram districts registered several cases against Nishad and others under Section 420 (Cheating) of IPC as well as the Prize Chits and Money Circulation Schemes (Banning) Act.
The alleged scam took place in 2020, mostly during the Covid lockdown period, ED sources said. The alleged victims were compelled to buy a non-existent crypto currency “Morris Coin”, listed with a Coimbatore-based cryptocurrency exchange called ‘Franc Exchange’, in a manner similar to an initial public offering purchase.
Explaining the modus operandi of the scam, ED sources said 10 Morris coins were valued at Rs 15,000 with a lock-in period of 300 days. The investors were given an e-wallet and told the coin value would boom when traded in the exchange.
But, the sources added, the promoters of the coin siphoned the money and illegally invested in immovable properties in Kerala, Tamil Nadu and Karnataka, particularly in real-estate without showing any source of income.