ED Arrests Armstrong Exchange Founder in Probe Into Alleged Online Betting Scam

The Enforcement Directorate (ED) has arrested Sagar Dash, founder of Armstrong Exchange Pvt Ltd, in connection with an alleged online gaming and betting scam involving the All Panel Exchange (APX) platform. A special court under the Prevention of Money Laundering Act (PMLA) has remanded him to ED custody for three days.

According to the ED, Dash was arrested on October 27 under the Prevention of Money Laundering Act, 2002. The agency launched its investigation after three FIRs were registered in connection with alleged online betting activities and cyber fraud linked to APX.

The probe has uncovered what the agency describes as a network of mule bank accounts and shell companies allegedly used to move proceeds of crime worth hundreds of crores of rupees.

### ED traces alleged money trail through bank accounts and shell entities

The agency alleges that funds generated through illegal online gaming and betting operations were first routed through several mule accounts held with Jubilee Hills Mercantile Cooperative Bank in Hyderabad.

The money was then transferred to multiple shell entities before significant amounts reached a nodal account maintained with Nagarbhavi Credit Cooperative Society in Bengaluru. This account was reportedly operated on behalf of Armstrong Exchange, a company established by Dash.

The ED further alleges that Dash used fabricated documents and KYC details associated with the cooperative society to open a cryptocurrency account. The agency believes hundreds of crores passed through the cooperative society's bank account, with a substantial portion allegedly linked to proceeds from illegal gaming and betting platforms.

Investigators are now working to trace the wider financial network and identify other individuals and entities that may have been involved in moving the funds.

### Searches lead to ₹9 Cr freeze; fintech executive also arrested

The latest arrest follows searches carried out by the ED at several locations across Pune, Mumbai, Bengaluru, Hyderabad, Surat and Mehsana in Gujarat.

During these operations, officials reportedly seized documents considered relevant to the investigation and froze around ₹9 Cr held across multiple bank accounts.

The agency has also arrested Ram U Ramdhani, CEO of Edsom Fintech Pvt Ltd, in connection with the case.

The ED said its investigation is continuing, with a focus on identifying the full network involved in the alleged transactions and tracing the proceeds of crime.

### ED steps up scrutiny of financial and crypto networks

The Armstrong Exchange case is part of the ED's wider efforts to investigate suspected money laundering and unauthorised fund transfers.

Recently, the agency initiated investigations into alleged FEMA violations involving crypto platforms Mudrex and Saber.money, along with decentralised finance (DeFi) protocol Instadapp and its associated platform Fluid. The probe concerns alleged unauthorised cross-border fund transfers worth more than ₹4,940 Cr.

Earlier, in June, the ED searched six premises linked to crypto-related platforms Transak, Carret, Xpat, Onramp.money and Onmeta over suspected unauthorised cross-border cryptocurrency transfers.

As the Armstrong Exchange investigation progresses, the agency is expected to examine the alleged links between online betting operations, cyber fraud, banking channels and cryptocurrency transactions.

The allegations against the individuals and entities involved remain subject to the ongoing investigation and legal proceedings.