Fintech Firms Under Fire: Major Lapses Uncovered in Money Laundering Probe

The Enforcement Directorate has exposed significant failings by several fintech companies amidst a money laundering probe related to a digital scam. The fraud involved impersonating law enforcement to extort personal information or money. Investigators are scrutinizing these firms for their possible involvement in facilitating these crimes.

The Enforcement Directorate has revealed significant shortcomings in multiple fintech firms amid a money laundering investigation. This probe follows a digital scam case where two individuals were arrested after authorities uncovered fraudulent operations targeting a senior citizen who lost Rs 33 lakh.

Cybercriminals executed a 'digital arrest', posing as law enforcement via phone or video to intimidate victims into surrendering money or personal data. The enforcement agency conducted extensive searches across multiple Indian states, exposing substantial non-compliance with Know Your Customer rules among the firms under scrutiny.

The investigation suggests that these companies accepted cash deposits from nonexistent entities, suspected to be proceeds from digital crimes funneled through mule accounts into cryptocurrencies and allegedly moved to foreign recipients. The ED has seized electronic evidence, including BTC and USDT currency, that substantiates these allegations.

(With inputs from agencies.)