Gorakhpur Police Bust Cyber Fraud Network Laundering ₹70 Lakh via Cryptocurrency and Hawala Channels

Gorakhpur Police have uncovered a major cyber fraud network that allegedly converted money from online scams into cryptocurrency and transferred it abroad through a hawala channel. Investigators say the mastermind, Shailesh Chaudhary, had direct links with Chinese hackers who guided him on managing crypto wallets and blockchain transfers.

So far, police have traced transactions worth ₹70.54 lakh, of which ₹9.60 lakh have been frozen.

According to the cyber cell, the gang used multiple bank accounts opened under fake NGOs, businesses, and shell companies to move fraudulent funds. The money was withdrawn in cash, converted into cryptocurrency, and then transferred overseas through organized hawala networks.

SP City said Chaudhary operated a network of “mule” accounts that received the scam proceeds. Once the funds were in, they were quickly withdrawn and converted to digital currency. For every transaction, he reportedly charged a 5–10% commission.

His associate, Adil Shafiq, is accused of opening several current accounts in the names of fake NGOs to facilitate cash conversion. Another member, Anuj Sahu, posed as a fish trader to open a business account used solely for withdrawals and crypto transfers. Shubham Rai and Vishal Gupta allegedly handled the conversion of cash into cryptocurrency through their network of digital intermediaries.

Investigators have identified four crypto wallet addresses linked to transactions in U.S. dollars. They also recovered WhatsApp chats with foreign numbers and a suspicious account under the name Team of Tutors.

The cyber crime unit is now tracking the gang’s banking trails, UPI IDs, digital wallets, and blockchain transfers to map the complete flow of funds — from the source of the fraud to its final destination abroad.

Preliminary findings suggest the gang was laundering Indian cyber fraud proceeds through cryptocurrency and sending them to Chinese handlers. Experts say the case reflects a growing trend of “digital hawala” — a mix of traditional money laundering and modern crypto-based fund transfers, often masked by NGO and business fronts.

Police have confirmed that they are working with Interpol and the Enforcement Directorate (ED) to trace the international links and identify the foreign counterparts involved.

This case adds to a series of similar cyber-enabled financial crimes showing how criminals are exploiting cryptocurrency to bypass traditional financial controls and move illicit funds across borders.