New Delhi, Jun 15 (PTI) The Enforcement Directorate (ED) on Monday conducted searches and arrested a person in a money laundering probe linked to an alleged Rs 500-crore cryptocurrency fraud that affected more than 2.48 lakh investors.

Premises linked to persons named Vijay Kumar Juneja and Masoom Juneja were raided, an official statement said on Monday.

Masoom Juneja has been arrested under the Prevention of Money Laundering Act (PMLA), the ED added.

The agency said the operation led to the recovery of "incriminating" documents and digital devices.

The money laundering investigation stems from FIRs registered by police in Himachal Pradesh and Punjab against Subhash Sharma and others.

According to the ED, Sharma, in connivance with co-accused Hem Raj, Sukhdev Thakur, Abhishek Sharma and Radhika Sharma, launched a cryptocurrency-based multi-level marketing (MLM) scheme in 2018 through an online platform designed to facilitate large-scale investor enrolment.

The platform was later shifted to foreign servers and operated through domains such as korvio.io and voscrow.com.

People were allegedly induced to invest in 'Korvio Coin (KRO)' through promises of assured high returns, seminars, promotional events, and manipulation of token values, according to the agency.

"The accused induced public investment in 'Korvio Coin (KRO)' by promising assured high returns, conducting misleading seminars, manipulating token values, and introducing new tokens to sustain a Ponzi structure, wherein funds from new investors were used to pay earlier investors," the statement said.

The agency alleged that digital records and internet domains linked to the operation were deleted to conceal evidence. However, recovered data revealed that more than 2.48 lakh users became victims of the fraud and transactions exceeding USD 219 million were carried out through the platform.

The ED estimated that the losses suffered by investors amounted to around Rs 500 crore.

According to the agency, the accused layered the proceeds of crime by routing funds through numerous bank accounts, fictitious firms and intermediaries and converting a portion of the money into cryptocurrency to obscure the audit trail.

The ED further alleged that funds collected from investors were routed to Vijay Kumar Juneja and Masoom Juneja.

"Upon receipt of such cash, they allegedly utilised the funds for acquiring immovable properties, wherein the registered values were significantly lower than the actual consideration paid.

"This arrangement enabled a substantial portion of the transaction value to be settled in cash and facilitated the laundering of funds generated from the fraudulent scheme," the agency said.

The ED recorded the statements of various persons and claimed that cash was handed over to Vijay Kumar Juneja and Masoom Juneja on behalf of Sharma and his associates.

The agency also alleged that the two were nominees in several employee-held accounts, indicating their "effective control" over these accounts, which were allegedly used in layering and concealing the proceeds of crime.

The agency also claimed that Sharma fled to Dubai after the fraud came to light in an attempt to evade prosecution. PTI MHS NES RT

Money laundering probe targets cryptocurrency Ponzi scheme using layered transfers, token manipulation and concealed property purchases. Money laundering investigation under the Prevention of Money Laundering Act arose from an alleged cryptocurrency-based multi-level marketing scheme said to have induced public investment in Korvio Coin through assured returns, promotional events, token-value manipulation and a Ponzi-style repayment structure. The alleged operation used online platforms and foreign servers, with funds routed through bank accounts, fictitious firms and intermediaries, and a portion converted into cryptocurrency to obscure the trail.