Hyderabad: Bhavnagar techie held by ED in Chinese betting apps case

HYDERABAD: The Enforcement Directorate (ED) has arrested a cryptocurrency operator in the Chinese betting apps case for transferring money abroad from Chinese companies in the form of USDT (Tether), a blockchain-based cryptocurrency.
Accused Naisar Kothari is a 26-year-old techie from Bhavnagar who carried out Rs 14 crore transactions. He was booked under the Prevention of Money Laundering Act (PMLA).ED PMLA court in Hyderabad granted custody of the accused to the ED for questioning from December 13 to 22. The ED said the online betting scam and hawala transactions involved Rs 1,100 crore transactions.
ED said in a note: “Login credentials and dongles for HSBC Bank accounts and payment aggregators such as Paytm, Cashfree and Razorpay were shipped to China and operated from there.”
“The money trail has revealed that a large amount of money was being transferred to cryptocurrency traders based in Bhavnagar, Gujarat,” ED said.
Kothari ransferred them to unknown wallets on foreign exchanges. Investigation revealed that Kothari began transactions from 2016 and was involved in cryptocurrency trading since then. Sources in the ED said that the destination of transferred cryptocurrency would be Hong Kong or China.
The ED began a probe under PMLA against two Chinese companies — Linkyun Technology Private Limited and Dokypay Pvt Ltd — based on an FIR lodged by Hyderabad central crime station (CCS) sleuths. A victim, who had lost money by investing in a betting app, filed a complaint with CCS.
The ED investigation had revealed that apart from providing payment aggregator re-seller services to banned apps in India, the Chinese-owned companies were indulging in international hawala and illegal activities. Three persons, including a Chinese national, were arrested earlier in this case and a chargesheet has been filed against them in the PMLA court.
The ED issued summons to Binance, a cryptocurrency exchange that provides a platform for trading various cryptocurrencies, in the case.
The ED had arrested Chinese national identified as Yan Hao and two accused — Dhiraj Sarkar and Ankit Kapoor — on September 15 in connection with the money laundering case. ED had earlier frozen Rs 47 crore held in four accounts in HSBC Bank. It identified 94 websites and apps of Chinese links resorting to online betting.