India’s Enforcement Directorate (ED) has arrested two men and searched 11 premises in a money laundering investigation into Hashpe, a platform it says was presented to the public as a cryptocurrency trading service. The agency puts the amount collected at roughly ₹40 crore.
Investors were promised returns from trading a cryptocurrency called TCX, according to the ED. When they tried to withdraw, the agency says, withdrawals were blocked and the money had already moved to accounts linked to shell entities, associates and relatives.
The ED said in a press release dated September 4 and shared on its X profile that its Chennai Zonal Office-II conducted searches under the Prevention of Money Laundering Act, 2002, at 11 premises in Chennai, Coimbatore and Kolkata on September 1, in connection with the Hashpe cryptocurrency fraud case.
How the Case Began
The ED investigation was initiated on the basis of a First Information Report (FIR) registered by the Cyber Crime Police in Puducherry against unidentified persons. The agency says Hitesh Kumar, Imran Basha, and Syed Usman, also known as Babu, together with their associates, floated a fraudulent investment scheme under the name Hashpe and projected it as a cryptocurrency trading platform.
Members of the public were dishonestly induced to invest on the false promise of lucrative returns through trading in a purported cryptocurrency named TCX, according to the release. None of the allegations has been tested in court, and the investigation remains at the pre-trial stage.
Celebrity Events and Social Media
The ED describes a promotional operation built around visibility. Its investigation found the modus operandi involved organising lavish promotional events, engaging Bollywood celebrities and conducting extensive social-media campaigns to attract investors.
The agency does not name any celebrity in the release, and does not allege that any performer who appeared at an event had knowledge of the scheme.
The purported value of the Hashpe token was artificially inflated to induce further investment, according to the ED. Investors were subsequently blocked from withdrawing, and the funds collected were diverted to bank accounts linked to shell entities, associates and relatives of the accused, leaving them deprived of both their invested funds and the promised returns.
Where the ED Says the Money Went
The agency’s analysis of bank accounts revealed the accused had collected approximately ₹40 crore, around $4.23 million at an exchange rate of ₹94.49 to the dollar as of 07:47 UTC on September 5, through these activities, which was further diverted and layered for money-laundering purposes.
A substantial portion of investors’ funds was routed to the personal bank accounts of Imran Basha and Hitesh Kumar, to business entities associated with them, and to their family members. The ED says the proceeds of crime were used to fund lavish lifestyles and to acquire immovable properties.
On that basis the agency has established Imran Basha and Hitesh Kumar as key accused in the money-laundering activities connected with the Hashpe fraud. The searches resulted in the seizure of incriminating documents and digital evidence relating to the offence.
Arrests and Custody
Both men were arrested under Section 19 of the PMLA on September 3 and produced before the Special Court for PMLA matters, which granted five days’ custody. Further investigation is in progress.
Section 19 permits arrest where the agency has material in its possession giving reason to believe a person is guilty of an offence under the Act, with the grounds required to be communicated to the person arrested.
Part of a Widening Enforcement Pattern
The case follows a run of ED actions on crypto investment schemes. The agency attached ₹55.5 crore in Mumbai properties and bank balances in the ATC Coin case in July, alleging promoters had diverted investor funds through company accounts after promising assured returns. In August it moved on the ₹113 crore Money Trade Coin case eight years after the scheme was first exposed.
The pattern is deliberate. ED Director Rahul Navin identified cryptocurrency fraud as a priority area at the agency’s 70th anniversary, alongside terror financing, cyber-enabled crime and narcotics trafficking. The Crypto Times has documented how the ED became India’s de facto crypto enforcement authority over the past year, through raids, seizures and FEMA notices.
