Kerala: One arrested in Rs 1,200 crore crypto fraud case

The arrested person has been identified as Abdul Gafoor, a native of Malappuram. A PMLA (Prevention of Money Laundering Act) court in Kozhikode remanded him in judicial custody.

ED sources said that the central agency would move the court on Monday seeking his custody for interrogation. They added that Gafoor, who was absconding since the scam was exposed, is the director of an inactive firm (shell company), Stox Global Brokers Private Limited, based in Malappuram. He had been actively involved in siphoning off the money sourced from investors and placing it in shell companies. The collected money was passed on to several inactive firms, sources said.

The ED had earlier identified K Nishad, who sneaked out of the country after the racket was busted, as the kingpin of the racket, which allegedly cheated around 900 investors. Subsequently, the ED attached his properties in Malappuram.

The investment in fake crypto coins had taken place in 2020, mostly during the lockdown. The affected people had bought a non-existent cryptocurrency “Morris Coin”, listed with a Coimbatore-based cryptocurrency exchange called Franc Exchange, in a manner similar to an initial public offering purchase. Ten Morris coins were valued at Rs 15,000 with a lock-in period of 300 days. The investors were given an e-wallet and told that the coin value would boom when traded in the exchange. But the promoters of the coin siphoned out the money and illegally invested in immovable properties in Kerala, Tamil Nadu and Karnataka, particularly in real estate without showing any source of income.

The ED last year picked up the money laundering case after the police in Kannur and Malappuram districts registered several cases against Nishad and others under Section 420 (cheating) of the Indian Penal Code as well as the Prize Chits and Money Circulation Schemes (Banning) Act.