
The Enforcement Directorate (ED) is currently investigating suspected illegal remittances of foreign exchange amounting to ₹50,000 crore. These investigations are part of the scrutiny of transactions carried out by fintech firms. According to sources familiar with the matter, these entities engaged in fake transactions such as the import of services, including software, exports from special economic zone units, provision of cloud computing services, and leasing GPU server space to send or receive money.
In addition to the investigation into illegal remittances, the alleged involvement of bank officials in leaking information about the ED probe to the accused is also under scrutiny. As part of the ongoing investigation, the ED recently conducted searches at the residences of one of the suspects, Manideep Mago, and his company, Birfa IT Services. Mago is said to have been involved in the illegal sale of cryptocurrencies and remittances of over ₹3,000 crore to Canada and Hong Kong.
Based on their findings, the Delhi Crime Branch filed a First Information Report (FIR) and arrested Mago and an accomplice named Sanjay Sethi. The ED will now investigate the company and the duo under the Prevention of Money Laundering Act.
The ED’s investigations revealed suspicious cryptocurrency transactions worth ₹1,850 crore conducted by Birfa IT Services, based in Delhi. Following these findings, the agency initiated an inquiry under the Foreign Exchange Management Act (FEMA) and discovered that the company had sold crypto assets worth ₹1,850 crore and encashed the amount. It was also found that ₹1,300 crore in cash was deposited and allegedly utilized for bogus outward remittances to Hong Kong and Canada.
Mago, described as an IT expert and cryptocurrency enthusiast, allegedly used complex jargon to deceive IT authorities and justify heavy outward foreign remittances to his own firms in Hong Kong and Canada. Mago set up companies abroad with the stated objectives of providing IT components, assembling servers, and escrow services, according to officials.
During the ED’s questioning, Mago claimed to have received ₹50,000 in cash and cryptocurrency from approximately 70,000 customers who approached him to purchase/lease space on his foreign servers for cryptocurrency mining. However, he could not provide any details about these customers. Additionally, Mago could not explain the source of the ₹1,850 crore worth of cryptocurrencies that he mysteriously obtained and received in his Binance account.
The ED is also investigating the alleged role of several bank officials who facilitated Mago in depositing large amounts of cash, which he declared in his income tax returns by showing bogus expenditure and making foreign remittances. The agency is identifying the beneficiary parties to which these funds were later diverted. ED officials claim that Mago, in collaboration with his employees, collected cash from hawala operators in Delhi and systematically sent it abroad.
During the raids conducted on May 28 at the residences linked to Mago and his company, the ED seized five high-end luxury cars worth over ₹5 crore, three cold crypto wallets, and ₹5.46 crore lying in bank accounts.