NEW DELHI: The Enforcement Directorate arrested two Chinese nationals, Xiao Ya Mao and Wu Yuanlun, on November 13 under the Prevention of Money Laundering Act (PMLA) in Tamil Nadu's Tiruchirappalli. They are accused of operating illegal digital loan applications to scam individuals during the COVID-19 pandemic. They have been sent to judicial custody till November 29.
The investigation focuses on digital lending applications operated by Chinese nationals who provided quick short-term loans between Rs 5,000-10,000 through mobile applications, imposing unreasonable interest rates on borrowers.
The proceeds were subsequently channeled through the WazirX cryptocurrency trading platform and withdrawn via various cryptocurrency wallets outside India, including Hong Kong, according to the ED.
The central probe agency revealed that victims downloaded these applications and sought small loans which required users to provide personal information, KYC documents, photographs, bank details, and access to their contact lists, photos, and videos.
Later, when borrowers failed to repay, they were compelled to obtain additional loans from other applications to settle existing debts, creating a cycle of indebtedness.
The investigation revealed that agents working for Chinese operatives harassed borrowers' family and friends. They created WhatsApp groups by accessing contacts from borrowers' phones and used these groups to send threatening messages.
The investigation also found that these agents "morphed" borrowers' photographs and "blackmailed" them with threats of posting these altered images on social media platforms.
During the COVID-19 pandemic in 2020, certain Chinese individuals established firms including Toucolor Technologies Private Limited and Truekindle Technology Private Limited. They coerced two Indian employees to become "dummy" directors by "forcing" them to sign documentation.
The Chinese nationals maintained complete control over the business operations.
The ED discovered that numerous financially distressed individuals had obtained quick short-term loans. At disbursement, 20-30 per cent of the approved amount was immediately deducted as processing fees and additional charges.
These loans had a duration of 7-15 days with unreasonably high interest rates.
The accused disbursed loans totalling Rs. 49.2 crore, of which Rs 3.54 crore was converted to cryptocurrency and transferred to wallets such as WazirX between August-December 2020. This amount was subsequently withdrawn in Indian currency through local bank accounts.
The investigation focuses on digital lending applications operated by Chinese nationals who provided quick short-term loans between Rs 5,000-10,000 through mobile applications, imposing unreasonable interest rates on borrowers.
The proceeds were subsequently channeled through the WazirX cryptocurrency trading platform and withdrawn via various cryptocurrency wallets outside India, including Hong Kong, according to the ED.
The central probe agency revealed that victims downloaded these applications and sought small loans which required users to provide personal information, KYC documents, photographs, bank details, and access to their contact lists, photos, and videos.
Later, when borrowers failed to repay, they were compelled to obtain additional loans from other applications to settle existing debts, creating a cycle of indebtedness.
The investigation revealed that agents working for Chinese operatives harassed borrowers' family and friends. They created WhatsApp groups by accessing contacts from borrowers' phones and used these groups to send threatening messages.
The investigation also found that these agents "morphed" borrowers' photographs and "blackmailed" them with threats of posting these altered images on social media platforms.
During the COVID-19 pandemic in 2020, certain Chinese individuals established firms including Toucolor Technologies Private Limited and Truekindle Technology Private Limited. They coerced two Indian employees to become "dummy" directors by "forcing" them to sign documentation.
The Chinese nationals maintained complete control over the business operations.
The ED discovered that numerous financially distressed individuals had obtained quick short-term loans. At disbursement, 20-30 per cent of the approved amount was immediately deducted as processing fees and additional charges.
These loans had a duration of 7-15 days with unreasonably high interest rates.
The accused disbursed loans totalling Rs. 49.2 crore, of which Rs 3.54 crore was converted to cryptocurrency and transferred to wallets such as WazirX between August-December 2020. This amount was subsequently withdrawn in Indian currency through local bank accounts.
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