India $2.2M Trading Scam Probe Identifies 20,507 Mule Accounts

_{Photo credit: PeopleImages / Shutterstock.com}

Investigators in India have identified 20,507 suspected mule accounts across the country used to launder ₹21.05 crore (approx. $2.2 million) stolen through an alleged cryptocurrency investment scam. The Times of India reports it as “one of the largest money-laundering networks uncovered in a cybercrime investigation.”

The Madhya Pradesh State Cyber Cell has traced the funds through multiple layers of transactions spanning bank accounts across India, obscuring the beneficiaries of the funds. Authorities have frozen ₹1.92 crore (approx. $200,000) so far, while a forensic audit is continuing.

The investigation began after a 70-year-old chartered accountant in Gwalior, Madhya Pradesh, reported losing  ₹21.05 crore to a fake cryptocurrency trading platform. The victim was reportedly contacted through WhatsApp by someone posing as an investment adviser and encouraged to trade cryptocurrencies, particularly Tether and Bitcoin.

After initially transferring smaller amounts of ₹100,001 (approx. $1,045), the victim was allowed to withdraw “profits” of ₹188,160 (approx. $2,000). This follows a common tactic used by fraudsters to build up trust and encourage victims to invest more money in the scam.

The fake trading platform displayed substantial returns of approximately $3 million, but demanded payments when he attempted to withdraw his funds. These included a ₹10.84 crore (approx. $1 million) income tax payment and a security deposit of 200,000 USDT. The victim contacted authorities after discussing the demands with friends.

Analysis found that the victim’s money moved quickly through four layers of money mule accounts. The first transaction layer contained 76 accounts, followed by 493 accounts in the second, 12,720 in the third, and 7,218 in the fourth. Investigators are now working with banks and financial intelligence agencies to identify the account operators, locate the beneficiaries, and recover the victim’s funds.

Police suspect an organized cybercrime syndicate that operates across India to be behind the scam.