Punjab police arrest 4 crypto traders from Malappuram over Rs 60 lakh fraud case

Kozhikode: The Cybercrime Division of Punjab Police picked up four cryptocurrency traders from Malappuram district in connection with an online cheating case on Saturday, August 12.

The arrested persons were identified as Suresh (50) and Manoob from Kondotty police station limits, and Suroor E and Shahal Vailathur in Tirur police station limit.

The cybercrime team from Mohali is now on their way back in train with the four accused.

The arrests come nine days after a team of Karnataka Police tried to arrest two crypto traders in Kochi and allegedly took Rs 4 lakh as a bribe. Kochi police charged the four officers with extortion and threatening to extort.

When contacted, an officer of the Cybercrime Division in Mohali said the unit received a complaint from a person saying he lost Rs 60 lakh to a “parcel scam”. He did not elaborate on the scam or reveal details of the complainant.

“The money trail led us to the four persons in Malappuram. Some portion of the money reached their bank accounts,” said the officer on condition of anonymity.

Sabeer Iyyathiyl of Tirur said his brother Suroor and his friend Shahal were arrested after they traded in digital currency tether (USDT) worth around Rs 8 lakh. 

Shahal received Rs 3.07 lakh on August 4, and Rs 5.05 lakh on August 7 in his bank account. The money was sent by one ‘Yupeng Wang’ through Kevinraj Consulting Private Limited based in Kanyakumari.

In lieu of the money received, Suroor transferred USDT worth Rs 8.12 lakh to Yupeng Wang’s account on Binance trading platform. 

Now Punjab police have arrested them accusing them of receiving ill-gotten wealth. “My brother and his friend have been involved only in legal and legitimate financial transactions,” said Suroor’s brother Sabeer, who is also a crypto trader.

How are traders to know if the money they receive in their bank account is sourced or linked to a scam, he asked.

The Mohali police officer said the division registered a case of extortion, cheating, forgery, criminal intimidation, criminal conspiracy under the Indian Penal Code, and also of identity theft and impersonation under the IT Act.

The police have shifted from freezing bank accounts to arresting innocent account holders, said Abdul Jabbar V H, a cyber activist who represents several victims of bank account freezes in Kerala. 

“The law and Supreme Court judgments have reiterated that the police should serve notice under Section 41A of the CrPC asking the accused to appear before them if the charges against them do not require arrest. I understand that the Public Police did not serve 41A notice to the accused,” he said.

To be sure, when Kochi Police took into custody four officers of Karnataka Police on August 3 for allegedly trying to extort two crypto traders, they were not arrested.

Kochi Police said they were served notice under Section 41A of CrPC and released because none of the charges against them had a punishment of more than seven years. “We went by the Supreme Court judgment,” said an officer of Kalamassery Police.

Again, none of the charges invoked by Punjab Police in this case (crime number 25/2023) has a punishment of more than seven years. 

This is becoming a serious issue, said Jabbar, who is also the general secretary of All India Virtual Asset Traders’ Association, a group of small-time cryptocurrency traders. “Here, the four accused did not directly receive money from the complainant. Yet they were arrested. Tomorrow, any bank account holder can be arrested on the whims of the investigating officers,” he said.

The association said it was raising money from its members to approach the Supreme Court seeking guidelines for investigating agencies on freezing bank accounts and arresting account holders.