An Indian law enforcement agency has arrested Naisar Kothari, a cryptocurrency trader, for his role in a money-laundering scheme linked to online Chinese betting scams. The arrest was made after the country’s Enforcement Directorate (ED) detected large amounts of money “being inexplicably transferred to some cryptocurrency traders.”
Indian Crypto Trader Arrested for Allegedly Using USDT to Launder Money on Behalf of Chinese Online Betting Scammers
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In addition to Kothari’s arrest, the ED conducted multiple raids on companies and individuals thought to be running illegal online betting apps. The ED believes the online apps, which are hosted outside India, are being operated by Chinese nationals.
In its report detailing the action against Kothari, one Indian media outlet states that the crypto trader allegedly purchased the USDT stablecoin on behalf of one company that is under probe. Kothari then transferred the digital currency to unknown wallets. According to Indian law enforcement:
Kothari had knowingly and actively involved himself in layering the proceeds of crime and hence he was arrested.
Following the arrest, an Indian court has since ruled that Kothari, who faces charges of breaching the country’s Prevention of Money Laundering Act (PMLA), be placed in custody until Dec. 22.
Meanwhile, the same report reveals that the ED has taken action against three other unnamed individuals, including one Chinese national. Additionally, action has been taken against two companies namely, Dokypay Technology and Linkyun Technolgy. The trio and the two companies are also accused of violating the PMLA according to a police file that was opened following a complaint.
Prompted by the complaint, the country’s law enforcement launched an investigation which subsequently 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.”
Furthermore, Indian law enforcement insists that criminals are exploiting the “lax due diligence mechanisms” associated with online wallets to “launch pan-India operations.”
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