Indias Enforcement Directorate Cracks Down On $890k Emoillent Crypto Scam

India’s Enforcement Directorate has launched a search operation against the founders of Emoillent Coin, a dubious cryptocurrency that promised investors lucrative returns.

Reports from local media allege that 2,508 investors in India lost a total of 7,343,6267 inr (approximately $890,000) in hopes of making profits from the cryptocurrency hype.

The fake coin, launched under the brand name “Emollient Coin Limited,” drew in users by offering returns of up to 40% in exchange for locking their investments for ten months. To further entice victims, it promoted a multi-level referral scheme that would reward up to 7% in commissions for bringing in more users.

Referral schemes of this sort are typical in multi-level marketing scams. The scam relies on constantly recruiting members in the name of investments in a promising project that doesn’t exist. When enough participants get involved, the scammers disappear with the funds.

In the case of Emollient Coin, the perpetrators operated the scheme using a mobile application. Funds were solicited via bank transfers, cryptocurrency exchanges, and even direct cash payments. The reports claim that scammers leveraged the popularity of Bitcoin (BTC) to convince users to make investments.

Emollient Coin Limited, which had a local office but falsely claimed to be based in London, was directed by a man named Henry Maxwell. The scam — active from 2017 to 2019 — involved the accused deliberately dissolving the fraudulent company, leaving users with losses. The Enforcement Directorate alleges that the scammers used the stolen funds to acquire land assets.

In response to multiple complaints filed in 2020 with the Additional District Magistrate in Leh, a northern Indian town where the scam was based, India’s law enforcement agency launched a search operation.

The accused — A R Mir, Ajay Kumar Choudhary, and two other promoters — are facing charges of defrauding numerous individuals. Under the Prevention of Money Laundering Act, the ED has seized the offices and assets linked to the scheme.

India has witnessed multiple crypto-related scams over the past years. In late June, law enforcement in Hyderabad launched an investigation into the Max crypto trading Ponzi, which duped at least 50 investors out of $200,000. 

During the same month, the ED froze $3.83 million in cash and other assets related to the Highrich online group, which was suspected of operating a similar scheme in the name of crypto investments. The month before, the agency cracked down on the “E-nugget” scam, which amassed over $10 million from its victims masquerading as a gaming platform.

India’s Financial Intelligence Unit has previously raised concerns regarding the potential misuse of cryptocurrency exchanges in money laundering. Crypto-based service providers in the nation are required to register with FIU-India and conform to the PMLA Act.