India’s Enforcement Directorate cracks down on $890k Emoillent crypto scam

The Enforcement Directorate of India has launched a search operation against the founders of the suspicious cryptocurrency Emoillent Coin, which promises lucrative returns to investors.

According to local media reports, 2,508 investors in India lost a total of INR 7,343,6267 (approximately $890,000) in the hope of profiting from the cryptocurrency craze.

Launched under the brand name “Emollient Coin Limited,” the fake coin lured users by offering returns of up to 40% in exchange for locking in their investments for ten months. To further lure victims, it introduced a multi-level referral scheme that rewarded up to 7% commission for bringing in more users.

Such referral schemes are typical of multi-level marketing scams. The scam is based on constantly recruiting members in the name of investing in a promising project that does not exist. Once enough participants are involved, the scammers disappear with the money.

In the case of Emollient Coin, the perpetrators ran the scheme using a mobile app. Funds were requested via bank transfers, cryptocurrency exchanges, and even direct cash payments. Reports claim that the scammers leveraged the popularity of Bitcoin (BTC) to convince users to invest.

Emollient Coin Limited, which claimed to have an office in London but falsely claimed to be based in London, was run by a man named Henry Maxwell. The scam, which was active from 2017 to 2019, involved the defendant intentionally dissolving the fraudulent company and causing damage to users. The Enforcement Directorate alleges that the fraudsters used the stolen funds to acquire land assets.

Following multiple complaints made in 2020 to the Additional District Judge in Leh, the northern Indian town where the scam is centred, India’s law enforcement agencies launched a search operation.

The accused – AR Mir, Ajay Kumar Choudhary and two other promoters – are facing charges of defrauding several people. Under the Prevention of Money Laundering Act, the ED has seized offices and assets linked to the scheme.

Indians are struggling with crypto scams

India has witnessed multiple crypto-related scams in recent years. In late June, law enforcement agencies in Hyderabad launched an investigation into crypto trading Ponzi scheme Max, which defrauded at least 50 investors out of $200,000.

In the same month, ED froze $3.83 million in cash and other assets related to the Highrich online group, which was suspected of operating a similar scheme in the name of crypto investments. The previous month, the agency cracked down on the “E-nugget” scam that collected more than $10 million from its victims under the guise of a gaming platform.

India’s Financial Intelligence Unit had previously raised concerns about the potential misuse of cryptocurrency exchanges for money laundering. Crypto-based service providers in the country are required to register with the FIU-India and comply with the PMLA Act.