The Enforcement Directorate (ED) arrested Syed Usman and Dhamodharan Balachandran in connection with a Rs 146 crore money-laundering investigation into the Hashpe cryptocurrency fraud case. They were arrested under the PMLA, 2002.
New Delhi [India], September 24 (ANI) The Enforcement Directorate (ED) on Thursday said it has arrested two persons in connection with a Rs 146 crore money-laundering investigation into the alleged Hashpe cryptocurrency fraud case.
Syed Usman, alias Babu, and Dhamodharan Balachandran were arrested under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002. ED's Chennai Zonal Office–II arrested both the accused on September 22. They were produced before a special PMLA court, which granted them three days of judicial custody.
Basis of ED Investigation
An ED investigation was initiated on the basis of a First Information Report (FIR) registered by the Puducherry Cyber Crime Police Station under various provisions of the Bharatiya Nyaya Sanhita, 2023, and the Information Technology Act, 2000.
The 'Hashpe' Investment Scheme
ED investigation revealed that Syed Usman, Imran Basha and their associates had floated an investment scheme under the name “Hashpe”, projecting it as a cryptocurrency trading platform. The federal agency said that the investors were allegedly induced to invest on the promise of lucrative returns through a purported cryptocurrency named “TCX”.
"Investors who trusted the scheme invested through bank transfers, cryptocurrency and cash," said the ED in a statement.
It is alleged that Syed Usman, Dhamodharan and their associates lured innocent investors by organising a launch event and a car award ceremony featuring Bollywood celebrities to make the investment scheme appear credible and attract investors. "The scheme also used referral commissions, social-media promotion and an event on a cruise ship in Mumbai to attract investors."
Investigation further revealed that "funds to the tune of Rs 146 crore were collected from investors through three major methods-- Proceeds of Crime (POC) to the tune of Rs 16 crore were received, Bank account of Hify Circle total credits Rs 10.52 crore, and PoC in the form of TCX coins to the tune of Rs 120 crore.
Roles of the Accused and Money Trail
ED investigation further revealed that Syed Usman, along with Dhamodharan, played a key role in the acquisition, layering and diversion of Proceeds of Crime (POC). ED said Syed Usman handled large cash investments, and he was also involved in operating the bank account held in the name of Hify Circle, which was used to receive investors’ funds.
Dhamodharan, however, developed and managed the Hashpe software, database and cryptocurrency-related operations, including the platform’s wallet functions.
It was further revealed that the POC were diverted into the personal bank accounts of Syed Usman, Dhamodharan, their family members and related entities. "The POC were also invested in cryptocurrency and immovable properties."
Previous Raids and Arrests
Earlier, ED conducted searches at 11 premises in Chennai, Coimbatore and Kolkata on September 1 in the case. Arrested accused Imran Basha and Hitesh Kumar are presently in judicial custody. (ANI)
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