India’s ED raided 21 sites linked to 4th Bloc Consultants on charges of running a decade-long fake crypto platform Ponzi that laundered money through wallets, shell companies, hawala and offshore accounts.
Summary
- ED’s office in Bengaluru searched 21 properties in Karnataka, Maharashtra and Delhi under the direction of PMLA and targeted 4th Bloc Consultants for large-scale crypto investment fraud.
- The group allegedly runs fake platforms that mimic real exchanges, uses stolen images of crypto experts, pays small early returns, and relies on MLM-style referrals and social media.
- Investigators say the proceeds were routed through multiple crypto wallets, shell companies, hawala channels and offshore accounts, with properties and wallet addresses now seized.
India’s Enforcement Directorate (ED) carried out coordinated raids at 21 locations in Karnataka, Maharashtra and Delhi on December 18, targeting an organization accused of running a cryptocurrency fraud, according to government statements.
The operation, carried out under the Prevention of Money Laundering Act (PMLA), targeted offices and residences associated with 4th Bloc Consultants and its associates. Investigators allege that the scheme defrauded investors in India and abroad for nearly a decade.
According to the ED investigation, which stemmed from a complaint filed by the Karnataka State Police, the alleged perpetrators operated through fictitious investment platforms designed to resemble legitimate global cryptocurrency exchanges. The platforms include personal dashboards, real-time balances and transaction histories, researchers said.
Indian ED raids continue
However, according to the ED, no actual market transactions took place behind the interface. Researchers described the structure as a Ponzi scheme or multi-level marketing (MLM) model, where funds paid by users would be laundered through the organization.
According to researchers, the group used images of well-known cryptocurrency commentators and public figures without permission to increase credibility. These fabricated testimonials reportedly served to attract new investors.
According to the ED, the scheme would have given small returns to initial investors to establish trust. Victims were then encouraged to invest larger amounts and recruit new members through referral bonuses. The organization used social media platforms such as Facebook, Instagram, WhatsApp and Telegram to expand its network internationally, investigators said.
The ED reported that seized funds, classified as proceeds of crime, were moved through a complex concealment system. This included multiple cryptocurrency wallets used to divide and hide funds, hawala transactions, paper companies, channels to transfer funds outside regulated banking systems, and undeclared offshore accounts where cryptocurrency was converted into cash through peer-to-peer (P2P) transactions.
According to the ED, during the searches, authorities identified numerous digital wallet addresses and seized movable and immovable properties acquired in India and abroad with alleged proceeds from the operations.
Investigators said the operation reportedly dates back to at least 2015. The promoters of 4th Bloc Consultants have adapted their techniques over the years to evade detection as cryptocurrency regulations evolved, the ED said.
The ED stated that analysis of seized servers and devices continues and investigation is still ongoing. Authorities said the aim is to map the network of foreign entities involved and recover money to compensate the victims.
