ED Takes Armstrong Exchange Founder into Custody Over Alleged Betting Operations
Sagar Dash, founder of the Armstrong Exchange, was arrested by the ED under the Prevention of Money Laundering Act (PMLA) in an alleged online betting and money laundering fraud. The probe includes suspected shell businesses, mule bank accounts and crypto currency transactions.
Sagar Dash, creator of Armstrong Exchange, has been arrested by the Enforcement Directorate (ED) on suspicion of involvement in an online gambling and betting scam. The Enforcement Directorate (ED) claimed in a statement that Dash was apprehended on October 27 in accordance with the 2002 Prevention of Money Laundering Act (PMLA). Dash has been detained at the ED custody for a period of three days by a special Mumbai PMLA court.
Three First Information Reports (FIRs) concerning All Panel Exchange (APX)-related internet betting and cyber fraud prompted the directorate to launch the investigation, according to the directorate. Subsequently, the ED initiated an investigation into APX's activities and associated financial dealings. A web of purported shell companies and mule accounts was subsequently identified by the agency as a means to launder hundreds of crores of rupees in illicit funds.
Findings of ED
The agency claimed that Dash established an account in the name of Armstrong Exchange Pvt Ltd using false documents and know your customer information. The Nagarbhavi Credit Cooperative Society and Dash collaborated to create this cryptocurrency account. The Enforcement Directorate further asserted that the cooperative society's bank account was used to launder hundreds of crores of rupees. Additionally, a large amount of the funds associated with these transactions come from illicit gaming and betting platforms.
The Enforcement Directorate claims that several mule accounts held by Hyderabad-based Jubilee Hills Mercantile Cooperative Bank were the original funnels via which the illicit funds were transferred. The funds were subsequently channelled through other front companies, with a sizable portion ending up in the node account stated earlier, held by the Nagarbhavi Credit Cooperative Society in Bengaluru. In order to determine who else was involved in the laundering of illicit funds, the ED has stated that it is maintaining its investigation into the subject.
ED’s Investigation Continues
The ED searched several cities, including Surat and Mehsana in Gujarat, as well as Pune, Mumbai, Bengaluru, and Hyderabad, leading to the most recent arrest. Nearly INR 9 Cr in cash stored across several bank accounts was frozen and incriminating documents were seized as a consequence of these searches. Edsom Fintech Pvt Ltd. CEO Ram U. Ramdhani was also apprehended by the authorities as part of the investigation.
In a larger crackdown on money laundering, the ED has made the arrest. Mudrex, Saber.money, and the decentralised finance (DeFi) protocol are all allegedly involved in crypto platforms that have recently been the subject of investigations by the directorate regarding possible FEMA violations. Instadapp and Fluid, a platform it is linked with, are being investigated for alleged unlawful international money transfers exceeding INR 4,940 Cr. Six locations are associated with five platforms—Transak, Carret, Xpat, Onramp. money, and Onmeta—were previously searched by the ED in June of this year for what they claimed to be unlawful international cryptocurrency transfers.
