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22 July 2026

ED investigation into cryptocurrency scam

The topic provides a practical example of money laundering challenges in the digital asset space, which is relevant for understanding the application of the PMLA in the context of cyber security and financial crimes.

1 min read 2 questions 1 prelims

Notes

  • The Enforcement Directorate (ED) is investigating a $35 million cryptocurrency over-the-counter (OTC) trading scam.
  • The investigation is conducted under the Prevention of Money Laundering Act (PMLA), 2002.
  • The modus operandi involved inducing investors to purchase discounted cryptocurrency tokens with promises of preferential allocations.
  • Tokens were either partially delivered or not supplied at all, particularly when market prices increased.
  • Funds were allegedly routed through cryptocurrency wallets to a Bengaluru-based individual identified as the mastermind.
  • The accused falsely claimed to have exclusive tie-ups with blockchain developers to procure discounted tokens.

Questions

  1. The rise of Virtual Digital Assets (VDAs) has introduced new challenges for financial regulators in India. Discuss the regulatory framework under the PMLA, 2002, in addressing money laundering risks associated with decentralized digital assets. 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00
  2. The lack of a comprehensive regulatory framework for cryptocurrencies in India poses significant risks to retail investors and financial stability. Critically analyze the need for a balanced approach that fosters technological innovation while ensuring robust consumer protection and anti-money laundering compliance. 250 words
    Attempt this — 250 words in 11 min
    0 / 250 words 11:00

Prelims

  1. The Prevention of Money Laundering Act (PMLA), 2002, is primarily enforced in India by which of the following agencies?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-07-22/ed-investigation-into-cryptocurrency-scam