Key Highlights
- The Enforcement Directorate arrested Syed Usman alias Babu and Dhamodharan Balachandran on September 22 under the PMLA.
- A Special PMLA Court granted both accused three days of judicial custody.
- The ED alleges that about ₹146 crore was collected through bank transfers, cash, and purported TCX tokens.
The Enforcement Directorate (ED) has arrested two more people in its money-laundering investigation into the alleged Hashpe cryptocurrency fraud case, taking the number of arrests in the probe to four.
According to an official release issued by the ED on September 24, the agency’s Chennai Zonal Office-II arrested Syed Usman alias Babu and Dhamodharan Balachandran on September 22 under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002. Both were produced before a Special PMLA Court, which granted them three days of judicial custody.
The investigation stems from an FIR registered by the Puducherry Cyber Crime Police Station under the provisions of the Bharatiya Nyaya Sanhita, 2023, and the Information Technology Act, 2000. The allegations remain subject to the ongoing investigation and judicial process.
ED alleges Hashpe was presented as a crypto platform
According to the ED, Usman, Imran Basha, and their associates operated an investment scheme under the name Hashpe, presenting it as a cryptocurrency trading platform.
The agency alleges that investors were encouraged to put money into a purported cryptocurrency called TCX, with returns being offered as an incentive.
The ED said investors transferred funds through bank accounts, cryptocurrency, and cash. Its investigation has identified three major categories of alleged proceeds:
- Around ₹16 crore received in cash.
- Approximately ₹10.52 crore credited to a bank account held in the name of Hify Circle.
- About ₹120 crore represented through purported TCX tokens.
The figures are based on the ED’s investigation and allegations and have not been established by a court.
ED details roles of two newly arrested accused
The agency has attributed different responsibilities to Usman and Balachandran.
According to the ED, Usman handled large cash investments and was involved in operating the Hify Circle bank account that allegedly received investor funds.
Balachandran, meanwhile, allegedly developed and managed Hashpe’s software, database and cryptocurrency-related operations, including the platform’s wallet functions.
The ED further alleges that the two men and their associates were involved in the acquisition, layering and diversion of the alleged proceeds. The agency said some of the funds were subsequently moved into personal bank accounts belonging to the accused, their family members and related entities.
Investigation covers crypto, bank accounts, and property
The ED is examining how the alleged proceeds moved after being collected from investors.
The investigation covers bank accounts, cryptocurrency wallets, and property records as the agency traces transactions linked to the alleged scheme.
The agency is also examining whether funds were converted into cryptocurrency or invested in immovable assets.
ED examines Hashpe’s promotional activities
The investigation also covers the methods allegedly used to attract investors.
According to the ED, Hashpe promoted the scheme through a launch event and a car award ceremony featuring Bollywood celebrities. The agency also cited referral commissions, social media promotion and an event on a Mumbai cruise ship.
The ED alleges these activities were used to increase participation in the investment scheme.
Searches preceded latest arrests
The latest arrests follow an ED search operation conducted on September 1 at 11 premises across Chennai, Coimbatore and Kolkata in connection with the Hashpe investigation.
The agency subsequently arrested Imran Basha and Hitesh Kumar on September 3.
With Usman and Balachandran now in custody, four people have been arrested in the case.
Hashpe money-laundering probe continues
The ED’s investigation is continuing into the alleged investment network and the movement of funds linked to Hashpe. The latest arrests have expanded the probe into the alleged roles of individuals involved in the scheme’s financial and technical operations.
The agency has yet to conclude the investigation, and the allegations against the accused have not been established by a court.
