One of the main suspects in the Rs 1,200-crore fake cryptocurrency fraud unearthed by the Enforcement Directorate in January has been arrested. Abdul Gafoor, a Malappuram resident, has been placed in judicial custody by a PMLA (Prevention of Money Laundering Act) court in Kozhikode, according to ED sources.
On Monday, the central agency would file a motion in court seeking his detention for interrogation, according to the sources.
Gafoor is the director of Stox Global Brokers Private Limited, a Malappuram-based inactive entity (shell company), according to ED sources. They claimed he was actively involved in allegedly syphoning money from customers who were duped into believing they were getting a good deal on crypto investments and then hiding it in shell businesses.
K Nishad, who fled the country after the racket was discovered, was previously identified by the ED as the leader of the scheme that reportedly defrauded around 900 investors. The ED then took possession of his Malappuram properties.
The money laundering case was taken up by the agency last year after police in Kannur and Malappuram districts filed various charges against Nishad and others under the Indian Penal Code’s Section 420 (Cheating) and the Prize Chits and Money Circulation Schemes (Banning) Act.
However, according to the reports, the coin’s founders diverted the money and invested it unlawfully in immovable properties in Kerala, Tamil Nadu, and Karnataka, notably real estate, without disclosing any source of income.
As the main proponent of the cryptocurrency, K Nishad, a resident of Malapuram, Kerala, announced the Initial Coin Offering of ‘Morris Coin,’ a new cryptocurrency token, in 2020.
Investors were required to retain 10 Morris Coins for 300 days in cryptocurrency wallets given by the promoters, following which the token was meant to be listed on a Coimbatore-based cryptocurrency exchange, ‘Franc exchange.’ The proponents guaranteed that once the tokens were published on the exchange, their value would skyrocket.
The tokens were non-existent in actuality, and they were never listed on any market. Furthermore, the Morris Coin promoters took all of the money and invested it in immovable properties in Karnataka and Tamil Nadu.
According to the Indian Express, Gafoor has been detained in judicial jail in Kozhikode under the Prevention of Money Laundering Act. They intend to petition the court today to allow for questioning.
