ED arrests kingpin in cryptocurrency fraud, money-laundering case

The Directorate of Enforcement (ED)’s Chennai Zonal Office II has arrested Syed Usman, also known as Babu, and Dhamodharan Balachandran on 22 September 2026 under Section 19 of the Prevention of Money Laundering Act (PMLA). The Directorate brought both accused before the Special Court, PMLA, which granted three days of judicial custody.

The arrests are part of a money-laundering investigation relating to the Hashpe cryptocurrency fraud.

The investigation started with an FIR filed by the Cyber Crime Police Station in Puducherry under the Bharatiya Nyaya Sanhita, 2023, and the Information Technology Act, 2000. The police found that Syed Usman, Imran Basha, and their associates set up an investment scheme known as Hashpe, presenting it as a cryptocurrency trading platform. They lured investors with promises of substantial returns through a supposed cryptocurrency called TCX. They obtained the money through bank transfers, cryptocurrency, and cash.

To make the scheme appear credible, the accused arranged a launch event and a ceremony awarding cars, which included Bollywood celebrities.

To attract more investors, the accused used referral commissions, promoted the scheme on social media, and held an event on a cruise ship in Mumbai.

The total amount of Rs 146 crore was raised through three main sources: `16 crore obtained in cash as part of the proceeds of crime, Rs 10.52 crore which was credited to a bank account under the name of Hify Circle, and Rs 120 crore in the form of TCX coins. Syed Usman, together with Dhamodharan, was instrumental in obtaining, stacking and redirecting the money earned through criminal activity.

Usman looked after the large amounts of cash and managed the Hify Circle bank account, which received money from investors. Dhamodharan designed and managed the Hashpe software, the database, and the cryptocurrency operations, including the platform’s wallet functions.

The funds were channelled into the private bank accounts of Syed Usman, Dhamodharan, members of their families and other associated organisations. They also put some of the money into cryptocurrency and into property. They then used the money to buy cars for certain investors, pay for appearances by Bollywood celebrities, organise cruises and large public events, give gold as gifts, and fund other luxurious personal expenses.

On 1 September 2026, the ED carried out searches at 11 locations in Chennai, Coimbatore and Kolkata. The two other persons accused in the case, Imran Basha and Hitesh Kumar, are currently in judicial custody. The funds moved in a consistent pattern: aggressive promotion, raising money from investors, routing it through multiple accounts and wallets, and finally directing it into personal assets and on to extravagant spending. Further investigation is still going on.