India’s Directorate of Enforcement (ED) has initiated prosecution against eight individuals and two entities in relation to an alleged cryptocurrency spoofing scheme that reportedly defrauded victims of over $20 million. The case centers on actions attributed to Chirag Tomar and his associates, who are accused of creating fraudulent websites designed to impersonate the cryptocurrency exchange Coinbase.
Key Takeaways
- Eight individuals and two entities have been charged by India’s Directorate of Enforcement (ED) in connection with a cryptocurrency fraud.
- The alleged scheme involved spoofing Coinbase websites to steal user credentials and cryptocurrency worth over $20 million.
- Chirag Tomar, a central figure, has already received a 60-month prison sentence in the United States for related offenses.
- The ED has provisionally attached assets valued at approximately $6.8 million as part of its ongoing investigation.
- This action occurs as India maintains a leading position in global cryptocurrency adoption.
The ED’s investigation was prompted by reports of Tomar’s arrest in the United States, leading Indian authorities to seek and obtain details of the U.S. criminal proceedings and evidence through Mutual Legal Assistance Treaty (MLAT) channels. Tomar was previously sentenced in the U.S. to a five-year prison term and two years of supervised release.
According to the ED’s statement, Tomar and his collaborators allegedly developed fake websites that mimicked Coinbase’s official platform. These deceptive sites were purportedly used to capture users’ login credentials and two-factor authentication codes. Upon successfully compromising victim accounts, the perpetrators are accused of transferring the cryptocurrency assets to wallets under their control. The stolen funds were then allegedly laundered through multiple wallets before being converted into Indian rupees via peer-to-peer transactions.
Further investigation revealed that proceeds from the alleged fraudulent activities were channeled into bank accounts associated with Tomar, his family members, associates, and related corporate entities. These funds were reportedly layered across various accounts before being used to purchase movable and immovable assets. In response, the ED has provisionally attached assets totaling 64.55 crore rupees (approximately $6.8 million) as part of its continuing inquiry into the matter.
This development follows closely on the heels of another significant enforcement action in India, where the Central Bureau of Investigation arrested Ayush Varshney, co-founder and CTO of Darwin Labs, at Mumbai airport. Varshney is implicated in the multi-year GainBitcoin scheme. Such actions underscore the increasing regulatory scrutiny within India’s rapidly expanding digital asset market.
India continues to be recognized as one of the world’s largest cryptocurrency markets. Recent reports indicate that the country has maintained its top ranking in global crypto adoption for the third consecutive year. The broader South Asian region has also witnessed substantial growth, with an 80% surge in crypto adoption observed between January and July 2025 compared to the same period in the previous year.
Potential Regulatory Precedent
The ED’s actions in the Coinbase spoofing case and the preceding GainBitcoin investigation signify a determined effort by Indian authorities to establish robust legal frameworks for digital assets. The successful collaboration through MLAT with U.S. authorities highlights a growing trend in international regulatory cooperation, crucial for combating cross-border financial crimes. This case may serve as a precedent for future enforcement actions, signaling that entities operating within or targeting the Indian market, even indirectly, must adhere to stringent compliance standards. The ED’s assertive stance on asset attachment also demonstrates a commitment to recovering illicit gains, potentially influencing how other jurisdictions approach the recovery of stolen cryptocurrency. As global regulatory bodies, including the EU with its Markets in Crypto-Assets (MiCA) regulation, continue to refine their oversight, India’s proactive enforcement suggests an alignment with the broader push for greater accountability and consumer protection in the digital asset space.
Source: : www.theblock.co