Enforcement Directorate on Fake Cryptocurrency Ponzi Scam.

Headnote:

The Directorate of Enforcement conducted extensive search operations across Himachal Pradesh and Punjab in connection with a large-scale fake cryptocurrency-based Ponzi/MLM scam that allegedly defrauded lakhs of investors of approximately ₹2,300 crore. The investigation revealed the operation of fraudulent crypto platforms, laundering of proceeds of crime through cash collections, shell entities, and benami properties, and deliberate violation of freezing orders issued by authorities.

Background:

• ED conducted searches at 8 premises in Himachal Pradesh and Punjab under the PMLA, 2002.

• The investigation pertains to a fake / fictitious cryptocurrency-based Ponzi and MLM scam affecting investors primarily in Himachal Pradesh and Punjab.

• ED initiated the probe on the basis of multiple FIRs registered by police stations in both states.

• FIRs were lodged against Subhash Sharma, the alleged mastermind (who fled India in 2023), and other associates for offences under the IPC, 1860, the Chit Funds Act, 1982, the Banning of Unregulated Deposit Schemes Act, 2019, and allied laws.

Findings of Investigation:

• The accused allegedly launched and operated fraudulent crypto-based MLM/Ponzi schemes through platforms such as Korvio, Voscrow, DGT, Hypenext, and A-Global.

• Investors were induced with false assurances of extraordinary returns, whereas the platforms were unregulated and self-created.

• Funds collected from new investors were used to pay earlier investors, characteristic of a Ponzi scheme.

• The accused repeatedly shut down and rebranded fake platforms to evade detection and conceal the fraud.

• Proceeds of Crime were laundered through cash-based collections involving builders, shell entities, and personal bank accounts of accused persons and their relatives.

• Several individuals acting as commission agents earned crores by recruiting new investors.

• Foreign travel incentives and promotional events were used as tools to attract and expand the investor base.

• Despite freezing orders dated 04.11.2023, one accused, Vijay Juneja (arrested by Himachal Pradesh Police in 2025), illegally sold 15 plots of land at Zirakpur, Punjab, in blatant violation of law.

Results of Search Operations:

• Three lockers were frozen along with bank balances and fixed deposits amounting to approximately ₹1.2 crore.

• Incriminating documents relating to investments in multiple immovable and benami properties were seized.

• Investor databases, commission structures, and digital devices were recovered, indicating large-scale generation and laundering of proceeds of crime.

Status of Investigation

• Further investigation in the matter is ongoing.

Legal Provisions Involved:

• Prevention of Money Laundering Act, 2002 – Search, seizure, freezing of assets and investigation into proceeds of crime.

• Indian Penal Code, 1860 – Cheating, criminal conspiracy and allied offences.

• Chit Funds Act, 1982 – Regulation of collective investment schemes.

• Banning of Unregulated Deposit Schemes Act, 2019 – Prohibition of unregulated deposit-taking activities.