In a major crackdown on digital financial crimes, the Income Tax Department’s Foreign Investigation Unit (FIU) in Hyderabad has busted a sophisticated cryptocurrency fraud racket involving Rs 170 crore in illicit trades, perpetrated through stolen identities and PAN cards of unsuspecting citizens. Acting on a Central Board of Direct Taxes (CBDT) report flagging 20 suspicious cases, officials conducted field verifications across villages in Telangana and Andhra Pradesh, confirming nine instances where trades were executed without the account holders’ knowledge. For investors, cybersecurity experts, and residents searching IT Department Hyderabad crypto fraud, Rs 170 crore identity theft scam, or PAN card crypto racket 2025, this operation highlights the growing menace of identity-based cybercrimes, with the FIU suspecting a larger network spanning Hyderabad, Siddipet, Khammam, Jagtial, Sattupalli, and Vijayawada. While no arrests have been made yet, the probe continues, urging victims to report via the cybercrime portal.
The scam exploited low-income individuals’ details to mask high-value crypto transactions, evading KYC norms and laundering funds through mule accounts.
The Scam Unraveled: Stolen Identities Fuel Crypto Trades
The FIU’s investigation began with CBDT alerts on anomalous crypto activities linked to seemingly ordinary PAN cards. Field teams visited rural areas to interview account holders, revealing a pattern of identity theft where fraudsters used stolen personal details to open trading accounts on platforms like WazirX and CoinDCX.
- Modus Operandi: Scammers acquired PAN cards and Aadhaar details from vulnerable groups—such as daily wage earners, small traders, and retirees—often through phishing or data breaches. These were then used to register crypto wallets and execute trades worth crores, routing funds via Telegram bots and hawala networks.
- Confirmed Cases: Nine victims, including a Khammam food delivery worker (Shiva Pamula) duped for Rs 8.5 crore in trades, confirmed no involvement. Total illicit volume traced: Rs 170 crore.
- Broader Network: Suspected links to international syndicates in Dubai and Southeast Asia, with Hyderabad as a hub for money muling.
A senior FIU official stated: “This is a sophisticated identity theft racket exploiting the poor to launder crypto gains—none of the trades matched the victims’ profiles.” The probe, under Section 131 of the Income Tax Act, has frozen several accounts, with raids planned.
| Case Detail | Victim Profile | Illicit Trades (Rs Cr) | Location |
|---|---|---|---|
| Case 1 | Retd Govt Employee | 3.2 | Hyderabad |
| Case 2 | Food Delivery Worker | 8.5 | Khammam |
| Case 3 | Small Trader | 5.1 | Siddipet |
| Total (9 Cases) | Low-Income Individuals | 170 | Telangana/AP Villages |
Government Response: Probes and Awareness Drives
The FIU, in coordination with the Enforcement Directorate (ED) and cyber police, is expanding the investigation to 20 flagged cases. Key actions:
- Account Freezes: Over 50 mule accounts linked to the trades, with Rs 12 crore in crypto seized.
- Inter-Agency Coordination: ED tracing hawala trails; cyber cells monitoring Telegram groups.
- Public Alert: CBDT urging PAN holders to monitor statements; helpline 1800-180-1961 for reporting.
This follows similar busts, like the Rs 1,646 crore BitConnect scam in Gujarat (February 2025) and Rs 10 crore crypto racket in Surat (June 2025).
Prevention Tips: Safeguard Your Identity from Crypto Scams
To avoid falling prey:
- Monitor Accounts: Regularly check PAN-linked statements on the Income Tax portal.
- Secure Documents: Never share PAN/Aadhaar via unsolicited calls; enable two-factor authentication on exchanges.
- Report Suspicious Activity: Use cybercrime.gov.in or 1930 helpline for crypto anomalies.
- Verify Trades: Avoid unknown apps; stick to SEBI-registered platforms.
Conclusion: A Wake-Up Call on Identity Theft in Crypto
The IT Department’s Rs 170 crore crypto fraud bust in Hyderabad exposes the dark underbelly of identity theft in digital finance, exploiting the vulnerable to launder gains. As probes deepen, it demands vigilant KYC and public awareness. For PAN holders, it’s a stark reminder—secure your details, or risk silent theft. Will this lead to tighter regulations? The investigations roll on. TOI
