Bengaluru: ED uncovers $35 million crypto OTC scam; digital assets worth 8,700 USDT seized

Published 21 July 2026 · local

The Directorate of Enforcement (ED), Bengaluru Zonal Office, has launched a money-laundering investigation into an alleged $35 million cryptocurrency over-the-counter (OTC) trading scam, significantly larger than the $10 million fraud initially reported in the FIR. The probe under the Prevention of Money Laundering Act (PMLA), 2002, stems from an FIR registered by the Cyber Crime Police Station, South Andaman, based on a complaint filed by a Dutch entity alleging it was cheated in OTC deals involving Virtual Digital Assets (VDAs). According to the ED, the accused allegedly induced investors to purchase discounted cryptocurrency tokens promising preferential allocations that were either only partially delivered or not supplied at all.

The agency has named Mohammed Waseem, Saurabh Diwan and Vaibhav Gupta as accused in the case. Investigators allege the trio gained the complainant’s confidence through private Telegram groups, in-person meetings and by projecting themselves as credible players in the crypto ecosystem. They allegedly completed smaller OTC transactions successfully before persuading investors to commit substantially larger sums. After receiving multi-million-dollar investments, the accused allegedly stopped delivering the promised crypto tokens when market prices surged. According to the ED, the funds were routed through cryptocurrency wallets to Ravindra K, a Bengaluru-based individual whom investigators suspect to be the mastermind behind the OTC deals.

The ED conducted searches at multiple locations on July 18 and 19 as part of the investigation. During the searches, investigators found that the accused allegedly portrayed themselves as “Key Opinion Leaders” in the cryptocurrency industry and token offerings through Telegram, WhatsApp, Instagram and dedicated websites. They allegedly claimed to have exclusive tie-ups with blockchain developers that enabled them to procure discounted token allocations and used these claims to attract unsuspecting investors. The agency alleged that investors were persuaded to transfer funds in virtual digital assets with promises of high returns or discounted allocations. However, the promised tokens or returns were allegedly not delivered, and the proceeds were diverted for personal expenses, investments in movable and immovable assets, and business activities.

The searches resulted in the seizure of digital devices, email records, cryptocurrency wallets allegedly used to siphon the proceeds of crime, and virtual digital assets worth 8,700 USDT. The ED said its investigation has so far indicated that the alleged fraud could be worth around $35 million. The agency also believes that several other foreign entities and investors may have been similarly defrauded but have not yet filed criminal complaints.