The Directorate of Enforcement (ED) has intensified its investigation into the alleged HashPe cryptocurrency fraud, conducting searches at 11 premises across Chennai, Coimbatore and Kolkata and arresting two individuals under the Prevention of Money Laundering Act, 2002.
According to the ED’s press release dated 4 September 2026, the searches were conducted on 1 September by its Chennai Zonal Office-II. Imran Basha and Hitesh Kumar were arrested on 3 September under Section 19 of the PMLA. A Special Court subsequently granted the ED five days’ custody of both accused.
The investigation concerns an alleged cryptocurrency investment scheme operated under the name “HashPe.” The ED claims that approximately ₹40 crore was collected from investors through promises of attractive returns linked to a purported digital token called TCX.
The allegations remain under investigation, and the arrest or remand of an accused does not constitute a final determination of guilt.
Background of the HashPe Investigation
The ED initiated its money laundering investigation based on an FIR registered by the Puducherry Cyber Crime Police against unidentified persons.
During the investigation, the agency alleged that Hitesh Kumar, Imran Basha and Syed Usman, also known as Babu, along with their associates, operated an investment scheme under the guise of a cryptocurrency trading platform.
Investors were reportedly encouraged to invest in a purported cryptocurrency named TCX after being promised lucrative returns. The alleged operators organised promotional events, used celebrity appearances and conducted extensive campaigns through social-media platforms to build visibility and attract investments.
According to the ED’s allegations, the apparent value of the HashPe token was artificially increased to create investor interest and encourage additional participation. Investors were allegedly unable to withdraw their money after depositing funds into the scheme.
How the Alleged Investment Scheme Operated
The HashPe case reflects a pattern commonly associated with high-risk digital investment schemes: visibility is created first, confidence is built through marketing and rapid appreciation is then presented as proof of the platform’s success.
In this matter, the agency alleges that investors were attracted through a combination of lavish promotional events, celebrity endorsements and social-media campaigns. These activities may have given the platform an appearance of legitimacy and commercial success.
The alleged artificial inflation of the TCX token’s value would also have created the impression that early investors were earning substantial returns. Rising values can encourage existing participants to invest more and persuade new investors to join.
However, a displayed token price does not necessarily represent real market value. If a cryptocurrency lacks independent trading activity, sufficient liquidity or a transparent price-discovery mechanism, its value may be controlled by the platform itself.
The real test begins when investors attempt to sell their tokens or withdraw their Money. According to the ED, withdrawals were eventually blocked, preventing investors from accessing their funds.
Approximately ₹40 Crore Allegedly Collected
An analysis of bank accounts reportedly indicated that approximately ₹40 crore had been collected from investors through the alleged HashPe scheme.
The ED claims that these funds were not used for the investment activities represented to investors. Instead, the money was allegedly diverted through bank accounts connected with shell entities, associates and relatives of the accused.
A substantial portion was reportedly transferred to the personal accounts of Imran Basha and Hitesh Kumar, as well as to business entities linked with them and their family members.
The alleged routing of funds through multiple individuals and entities is particularly relevant under the PMLA. Investigators generally examine whether transactions were structured to conceal the source, ownership, movement or ultimate use of suspected proceeds of crime.
The agency further alleged that part of the money was used to fund lavish lifestyles and acquire immovable properties.
These claims remain subject to further investigation and judicial scrutiny.
Searches Across Three Cities
The ED conducted searches at 11 premises located in Chennai, Coimbatore and Kolkata on 1 September 2026.
The searches reportedly resulted in the seizure of documents and digital evidence considered relevant to the alleged offence of money laundering. Such evidence can include mobile phones, computers, banking information, investor records, cryptocurrency wallet details and communications involving promoters or associates.
In cryptocurrency-related investigations, digital evidence is especially important. Transactions may involve multiple wallets, exchanges, bank accounts and payment intermediaries. Investigators may analyse blockchain records alongside conventional banking transactions to identify how funds were received, moved and converted.
Imran Basha and Hitesh Kumar were arrested two days after the searches. They were produced before the Special Court under the PMLA, which granted the ED five days of custody.
Further investigation is continuing.
Why Celebrity Promotion Does Not Guarantee Legitimacy
One of the most important aspects of the allegations is the use of celebrity appearances and promotional events to attract investors.
A celebrity’s involvement in an event or advertising campaign should never be treated as independent verification that an investment is legitimate. Celebrities may participate as paid promoters without examining the product’s financial structure, legal status, liquidity or risk.
Investors should separately verify:
- Who operates and controls the platform
- Whether the business has a verifiable legal entity
- How the token’s price is determined
- Whether investors can freely withdraw their funds
- Where deposited money is held
- Whether financial statements or audits are available
- Whether promised returns depend on recruiting new investors
- Whether the platform makes guaranteed or unusually high return claims
Professional branding, premium events and a large social-media presence cannot replace financial transparency or regulatory due diligence.
Money Laundering Risks in Cryptocurrency Schemes
Cryptocurrency itself is not proof of unlawful activity. However, digital assets may be misused when platform operators conceal ownership, route money through unrelated entities or convert investor funds into assets without a genuine business purpose.
Under the PMLA, authorities can investigate property derived or obtained from criminal activity connected with a scheduled offence. The investigation may extend to bank accounts, businesses, relatives and associates if they are suspected of receiving, holding or transferring proceeds of crime.
Businesses associated with crypto platforms should maintain clear records showing the source and purpose of funds, customer identities, wallet ownership, bank-account reconciliations and the commercial basis of transactions.
Directors and employees should also avoid permitting their personal accounts or business entities to be used for unexplained third-party transfers. Even indirect participation can result in serious scrutiny if the financial trail cannot be properly explained.
Practical Lessons for Investors and Businesses
The HashPe case provides several important lessons:
- Do not invest solely on the basis of celebrity promotions or social-media claims.
- Be cautious of guaranteed, fixed or exceptionally high returns.
- Test a platform’s withdrawal facility before committing substantial funds.
- Verify whether a token has genuine liquidity on independent exchanges.
- Preserve payment receipts, wallet addresses, emails and promotional material.
- Avoid transferring funds to personal accounts or unrelated business entities.
- Report blocked withdrawals and suspected fraud without delay.
- Businesses should conduct enhanced KYC and anti-money laundering checks for high-risk digital-asset transactions.
- Obtain professional advice before responding to an ED notice, summons or search.
Early documentation can be critical when investors later need to establish the amount invested, representations made and destination of funds.
The Larger Takeaway
The alleged HashPe scheme shows how marketing can create an impression of credibility even when the underlying financial structure remains unclear.
For investors, the key question should not be how quickly a token’s displayed value is rising. It should be whether the asset has genuine demand, transparent ownership, independent liquidity and a reliable withdrawal mechanism.
For businesses, the case highlights the importance of maintaining a clean financial trail. Funds received through digital platforms must be properly identified, recorded and used for a legitimate purpose. Routing money through shell entities, associates or relatives can create significant exposure under the PMLA.
Shunyatax Global Insights
Crypto businesses, investors and financial intermediaries should regularly review their transaction records, KYC systems, bank accounts and digital wallets. A well-documented compliance framework can help identify suspicious transactions early and provide essential support during regulatory scrutiny.
If you or your business is facing challenges involving a cryptocurrency investment dispute, blocked withdrawals, an ED search, a PMLA investigation or unexplained digital-asset transactions, Shunyatax Global can provide professional guidance to help you assess the financial trail, organise the necessary documentation and proceed with clarity and confidence.
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Phone: +91 94615 14198
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Disclaimer: This article is based on an ED press release and related reports and is intended solely for general information. All allegations remain subject to investigation and judicial determination. An arrest or remand does not establish guilt. This content does not constitute legal, tax, investment or financial advice.