India's central bank exposes two bank officials aiding crypto cybercriminals

The Central Bureau of Investigation (CBI) in India has announced the arrest of two bank officials for aiding cybercriminal operations. According to reports, the two bank officials were responsible for the creation of mule accounts in collaboration with these cybercriminals.

The CBI claimed that the bank officials worked hand in hand with the criminals, helping them move their illicit funds through the creation of these mule accounts.

Criminals typically use mule accounts to obscure the origin of funds, which are stolen in most cases. After moving them through several local accounts, the funds are then transferred into digital assets before they are moved out of the country.

CBI arrests bank officials for aiding cybercriminal operations

The CBI mentioned that the most alarming aspect of the whole operation is that the arrested officials were the ones providing tips to the criminals to ensure they evade detection, and their operations ran without any challenges.

Both officials were relieved of their duties immediately, and their financial institutions were informed of their roles in the operations. The officials are also awaiting their first appearance in court as the CBI continues investigations.

According to the CBI statement, mule money frauds operate a network that starts with the cybercriminals stealing money or digital assets from their victims. Once the theft has been carried out and the criminals are in charge of the funds, the money is then laundered until it is impossible to trace.

To make this possible, the criminals move the funds in small denominations across thousands of bank accounts, increasing the number of transactions until it becomes too much to follow.

Once they are satisfied with the layered transactions, the money is then exchanged into digital assets and is sent out of India to the top brass of the fraud network.

In some cases, the criminals recruit people to source these bank accounts, while in other cases, like this, the bank officials use the bank accounts of innocent people to facilitate the laundering. In addition, the bank officials also altered the real IDs of customers to create new accounts with different names for this purpose.

Bank officials will be presented in court

In its press release, the CBI mentioned that the officials received money for helping the cybercriminals. The agency mentioned that based on the analysis carried out on digital devices seized during investigations, sufficient evidence pointed the CBI to the then Assistant Manager of Canara Bank in Patna, and the then Business Development Associate of Axis Bank, Patna. Both of them played active roles in aiding the operations of the cybercriminals.

Axis Bank released a statement noting that the matter is under active investigation and the bank is cooperating with the authorities so the issue can come to a swift resolution. The statement was released through a spokesperson who added that the bank continues to uphold the highest standards of integrity as a responsible institution. It also noted that the bank maintains zero tolerance for any conduct that violates its policies or code of ethics.

Over the last few weeks, banks like HDFC, ICICI, and others have suspended digital account opening due to the rise in money mule accounts. According to Kanishk Gaur, the CEO of Athenian Tech, money mule accounts have been on the rise, and operating such bank accounts can take any form. He noted that sometimes, bank officials help the cybercriminals launder the funds before they’re moved into digital assets, and other times, the customers sell their information to become part of the network.

Gaur claimed that the notion behind using so many accounts is just to ensure whoever is tracking the funds gets to several dead ends, and by the time they eventually figure out the source, the funds would have been moved into crypto and sent out of the country.

The CBI says its investigation is also looking into the likelihood that the case is connected to others that are currently under investigation.

Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program