Key Highlights
- Mangaluru police arrested two men accused of running a USDT pipeline sending cybercrime funds from India to China.
- The suspects allegedly collected 70+ mule bank accounts, linked to 88 complaints on India’s NCRP portal.
- Authorities seized 1,479 USDT, debit cards, passbooks, and phones during the crackdown on the crypto-laundering network.
Mangaluru Cyber Crime Police in India have arrested two individuals for allegedly operating a crypto-linked fraud pipeline that funnelled money from Indian cybercrime victims to operators based in China.
The accused, Mohammed Aneesh (30), a resident of Kasaba Bengre, and Saleeth Ahmed M. (32) from Surathkal, were taken into custody after a complaint filed on March 10 by a Mangaluru resident named Mohammed Sinan.
According to police, Sinan alleged that the two had taken his bank account details under the pretext of using them for a trading business, but the account later surfaced in cyber fraud activity.
How the Operation Worked
Investigators say the accused ran what can best be described as a USDT arbitrage-and-laundering operation. They purchased Tether (USDT) from individuals in India at lower prices and then sold it at higher rates to cyber fraudsters based in China, coordinating through WhatsApp and Telegram.
The Chinese operators allegedly transferred proceeds from cybercrimes committed against Indian citizens into the mule bank accounts collected by the accused. To keep the operation running, Aneesh and Ahmed were continuously recruiting fresh bank accounts from unsuspecting members of the public across Mangaluru city and the surrounding areas.
During the arrest, police seized four mobile phones, 18 debit cards, 17 bank passbooks, six cheque books, 1,479.31 units of USDT, and a Maruti car. Further examination of the seized devices revealed that the duo had collected more than 70 bank accounts from people in and around Mangaluru. Of these, 37 accounts have already been flagged on the National Cyber Crime Reporting Portal (NCRP), with 88 complaints registered from across the country.
The case has been registered at the Mangaluru City Cyber Crime Police Station under Sections 66(C) and 66(D) of the Information Technology Act and Sections 308(5), 318(4), 319(2), and 3(5) of the Bharatiya Nyaya Sanhita (BNS), 2023.
Part of a Bigger Pattern in Karnataka
This arrest is not an isolated incident. It lands squarely within a broader, intensifying crackdown by the Karnataka State Cyber Command against mule account networks operating across the state.
Between December 2025 and February 2026, the Cyber Command — under the supervision of DGP Pronab Mohanty — arrested 68 individuals as part of a statewide special drive targeting mule herders. During that operation, police registered 60 cases, identified 869 mule accounts, and linked them to 8,788 complaints on the NCRP portal. The total money involved in the linked crimes stood at ₹85.05 crore, of which ₹13.43 crore was frozen.
Separately, in February 2026, Mangaluru CEN Police busted a Nepal-based investment fraud racket and arrested 11 Indian nationals for running large-scale online scams that targeted victims through fake trading platforms. In that case, investigators identified 624 bank accounts used to move money, with one account alone showing transactions worth ₹167 crore. The stolen funds were rapidly converted into USDT and transferred abroad, making recovery nearly impossible.
The ‘Crypto-as-a-Service’ Threat
What makes the Mangaluru case particularly noteworthy is the operating model. The accused were not running a conventional crypto scam — they were providing infrastructure for one. By collecting mule accounts and converting fiat proceeds into USDT for overseas handlers, they were effectively offering “crypto-as-a-service” to foreign fraud operators.
This mirrors a national-level pattern flagged by India’s Enforcement Directorate (ED) at a recent conference, where officials described crypto-enabled fraud ecosystems as being organized like corporations — with dedicated departments for onboarding victims, managing mule accounts, routing funds through shell entities, and converting money into crypto to erase trails.
The ED has so far attached assets worth ₹12,229 crore in connection with a sprawling transnational cyber investment scam ecosystem.
Cases like this one from Mangaluru underscore a growing reality in India’s crypto crime landscape: the biggest threat is not always the headline-grabbing scam itself, but the quiet infrastructure layer that makes the scam work — the mule accounts, the USDT pipelines, and the local operators who keep the money moving for handlers based thousands of kilometres away.
Police said further investigation is underway to trace the full financial trail and identify other individuals connected to the network.
Also Read: India’s Crypto Crackdown is Working Perfectly. That’s Exactly the Problem
