Chennai, Sep 22 — The Enforcement Directorate (ED) has arrested Syed Usman, also known as Babu, and Dhamodharan Balachandran in its money laundering investigation into the alleged Hashpe cryptocurrency fraud.
Both were arrested on September 22 under Section 19 of the Prevention of Money Laundering Act, 2002, and produced before a special PMLA court, which sent them to three days' judicial custody, the agency said.
The ED has not, in its brief announcement of the arrests, specified Balachandran’s alleged role in the scheme. The arrests are the latest development in an investigation that has already led to searches and the detention of two other suspects.
On September 1, the ED’s Chennai Zonal Office-II searched 11 premises in Chennai, Coimbatore and Kolkata as it examined how money collected through Hashpe was handled. The agency subsequently arrested Hitesh Kumar and Imran Basha on September 3.
According to the ED’s account of the earlier searches, Hitesh Kumar, Basha, and Usman, along with associates, allegedly promoted Hashpe as a cryptocurrency trading platform. Investigators say investors were offered the prospect of attractive returns through a purported token called TCX. Those claims, and the movement of investors’ money, form part of the continuing probe.
The agency is investigating whether funds obtained through the alleged investment scheme were diverted and whether transactions involving those funds amount to money laundering.
Its inquiry follows allegations of fraud examined by the Puducherry Cyber Crime Police. The ED’s case concerns the alleged handling of proceeds from that underlying offence.
The latest arrests bring Usman, whom the ED had named in its account of the suspected scheme, into custody alongside Balachandran. Their three-day judicial remand allows the proceedings before the special court to continue while investigators pursue the money trail.