HashPe crypto fraud: ED attaches ₹14 crore, BMW included

How did the HashPe scheme allegedly work?

The ED says HashPe ran through the website hashpe.io and a multi-level marketing network. Agents called 'Leaders' earned commissions for bringing in new investors. Money came in as cash, bank transfers and crypto, with USDT (a dollar-linked stablecoin) and Bitcoin used for transactions.

The trading, the agency says, was not real. Money from new investors allegedly paid earlier investors and agent commissions. The promoters also allegedly created tokens called TCX and HashPe at almost no cost and gave them made-up values, so the platform could show profits that did not exist. Eventually withdrawals stopped and the platform was frozen.

To look credible, the promoters allegedly used celebrity endorsements, events with luxury cars and gold, and foreign cruises.

The numbers and the arrests

The ED estimates ₹112.91 crore was collected. Part of it went back to investors. The rest allegedly moved to bank accounts of 'HIFY Circle' and related entities, then into cryptocurrency, and was spent on personal expenses, loan repayments, heavy commissions and promotion. The agency puts the proceeds of crime at ₹49.54 crore.

The case began with an FIR from the Cyber Crime Police Station in Puducherry. After searches on September 1, four people were arrested: Imran Basha, Hitesh Kumar, Syed Usman alias Babu, and Dharmendra. All are in judicial custody. The ED says Usman handled large cash investments and the HIFY Circle account.

The case comes as ED offices step up action on crypto. Searches hit CoinDCX and Delta Exchange India on November 7, and Mudrex, Saber.money and Instadapp on October 29.