ED arrests one more person in Rs 1,200 cr Kerala cryptocurrency fraud

CG Sankar

Going by the 2022-23 Union Budget, income from cryptocurrency will be taxed at 30 percent from the financial year 2022-23. “This does not mean, cryptocurrencies are legally allowed here as we don't have proper laws for it” said George Joseph.

Representational Image: AFP

Kochi: The Enforcement Directorate (ED) has arrested one more person in connection with the massive cryptocurrency fraud in which 900 people have been cheated of a whopping sum of Rs 1,200 crores.

According to the available information, the officials from ED at Kozhikode sub-zonal office, arrested one Abdul Gafoor, Director of Stox Global Brokers Private Limited, on Thursday in connection with the case.

He was arrested during an investigation in a money laundering case against a person named Nishad K, who ran an agency named 'Morris Coin Crypto Currency'. Nishad, the prime accused in the case, and others have cheated more than 900 investors to the tune of Rs 1200 crore. By claiming that they have links with people who have minted money through cryptocurrency , the fraudsters compelled people to invest money to get huge returns. Abdul Gafoor actively facilitated the layering of the proceeds of crime through differnt entities. An amount of Rs 39 crores was transferred through Stox Global Brokers Private Limited. Abdul Gafoor has been sent to judicial custody by PMLA special court and the remand application of ED will be heard on Monday. Earlier, ED attached Noushad's asset worth Rs 36 crores under PMLA and seven others were arrested.

Losing money after investing in cryptocurrency has become a common affair in the state of Kerala as many have been coming out everyday raising such complaints. Tempted by the fake promises by bogus agencies, people invest in cryptocurrencies eying huge returns only to lose money.

“In India, we neither have a law for the safe and secured investment in cryptocurrency nor any agency to monitor cryptocurrency transactions and its market. However, cryptocurrency transactions are not legally prohibited . People can invest at their own risk. Investing in cryptocurrency requires certain technical knowledge, which the common man does not possess,” said George Joseph, a financial expert.

According to Investopedia, cryptocurrencies are digital or virtual currencies underpinned by cryptographic systems. They enable secure online payments without the use of third-party intermediaries. "Crypto" refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions.

“Cryptocurrencies are digital assets secured through an online mining process based on block-chain technology and huge algorithms. Cryptocurrencies cannot be converted into Indian money but can be transferred to potential buyers for money or other assets. Even internationally, there is no proper mechanism available for monitoring it and it poses a great threat to the existing financial systems. Cryptocurrencies are largely used by international agencies for drug and arms deals as it is easier for them to evade legal frames,” he added.

By making use of people's ignorance, various agents and agencies approach people directly to convince them about their links with people and agents in foreign countries dealing with cryptocurrencies. “Such agencies are not recognised by Indian laws or are approved by RBI or Indian government. Those who invest money in it may not get returns owing to its value fluctuations in the market or some other reasons,” added George Joseph.

He also advised the public not to invest in cryptocurrency as there is no guarantee for the money one deposits. “Go for investment only if it has the backing of an authorised mechanism,” he added.

Going by the 2022-23 Union Budget, income from cryptocurrency will be taxed at 30 percent from the financial year 2022-23. “This does not mean, cryptocurrencies are legally allowed here as we don't have proper laws for it” said George Joseph.

As of now, only a few countries have accepted cryptocurrencies but nearly a hundred countries have taken measures for framing guidelines for making it legal.

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