The Enforcement Directorate has arrested Syed Usman alias Babu and Dhamodharan Balachandran in a money laundering investigation linked to the alleged Hashpe cryptocurrency investment scheme. The agency said the case involves about ₹146 crore raised through bank transfers, cryptocurrency transactions and cash, with investors allegedly promised high returns through the TCX digital asset. The arrests were made under Section 19 of the PMLA and followed an FIR registered by Puducherry Cyber Crime Police. The accused were remanded to three days of judicial custody, according to the ED.
ED arrests two in Hashpe cryptocurrency fraud case linked to ₹146 crore alleged money laundering probe
The Enforcement Directorate arrested two individuals in a money laundering probe related to the alleged Hashpe crypto fraud case. Authorities say investors were promised high returns through a supposed digital asset scheme.
In a major development in the Hashpe cryptocurrency fraud case, the Enforcement Directorate has arrested two people in connection with an alleged ₹146 crore money laundering case linked to an investment scheme being operated through multiple channels.
Enforcement Directorate said Syed Usman alias Babu and Dhamodharan Balachandran were arrested by Chennai Zonal Office-II under Section 19 of the Prevention of Money Laundering Act, 2002.
The two men were arrested on September 22 and were produced before a special Prevention of Money Laundering Act court, which remanded them to three days of judicial custody, the agency said.
The investigation was initiated on a First Information Report registered by the Puducherry Cyber Crime Police Station under the Bharatiya Nyaya Sanhita, 2023, and the Information Technology Act, 2000.
Syed Usman, Imran Basha and their associates allegedly operated an investment platform called Hashpe, which authorities said was a cryptocurrency trading investment platform with high returns for investors.
Investors were allegedly asked to invest through bank transfers, cryptocurrency transactions and cash payments based on promises related to a supposed cryptocurrency called TCX, the Enforcement Directorate said.
Hashpe investment scheme allegedly used events and promotions to attract investors
Organisers marketed the scheme through various marketing efforts, including referral commissions, social media campaigns and public events to increase the platform’s perceived credibility, investigators said.
The Enforcement Directorate said launch events and car award ceremonies involving Bollywood celebrities were held to attract participants and create confidence among prospective investors who were considering financial commitments.
The agency also said that a promotional event organised on a cruise ship in Mumbai was utilised to generate interest among investors and boost participation.
Officials said their investigation found that some ₹146 crore was raised from investors through various channels related to the alleged scheme and related financial dealings.
The Enforcement Directorate said it received proceeds of crime to the tune of about ₹16 crore directly, and credits amounting to ₹10.52 crore came into a bank account operated in the name of Hify Circle.
Besides, investigators claimed that the proceeds of crime of around ₹120 crore were held in the form of TCX coins linked to the cryptocurrency platform.
The agency said investors were drawn to the project by the lure of lucrative returns and marketing campaigns that promoted the platform’s purported growth potential.
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Enforcement Directorate details alleged diversion of investor funds
Syed Usman and Dhamodharan Balachandran played a key part in the acquisition, layering and diversion of the proceeds of crime generated by the investment scheme, the investigators said.
The Enforcement Directorate claimed Syed Usman managed substantial cash investments and was involved in operating the Hify Circle bank account, which is said to have received funds from investors.
Dhamodharan Balachandran is accused of building and running the Hashpe software infrastructure, database systems and cryptocurrency-related functions, including the management of the platform’s digital wallets, according to officials.
The agency also alleged that the proceeds of crime were transferred to the personal bank accounts of the accused, their family members and entities connected with them.
Parts of the alleged proceeds were also invested in cryptocurrency assets and immovable properties as part of the larger financial network, the Enforcement Directorate said.
Earlier this month, the agency conducted searches at 11 premises in Chennai, Coimbatore and Kolkata as part of the ongoing investigation into the alleged fraud.
Imran Basha and Hitesh Kumar were already taken into custody in connection with the case and are in judicial custody, the Enforcement Directorate said. As the investigation continues, authorities are expected to further scrutinise financial transactions, electronic assets, and property purchases linked to the alleged scheme. Sprouts News will continue to monitor developments as the court proceedings and investigative actions unfold.
