On September 22, 2026, the Chennai Zonal Office II of the Directorate of Enforcement (ED) apprehended Syed Usman, referred to as Babu, along with Dhamodharan Balachandran, under Section 19 of the Prevention of Money Laundering Act (PMLA). The suspects were subsequently presented to the Special Court for PMLA, which sanctioned a three-day period of judicial custody.
These arrests are linked to an investigation into financial misconduct surrounding the Hashpe cryptocurrency scam.
The inquiry was initiated following a First Information Report (FIR) lodged by the Cyber Crime Police Station in Puducherry, citing violations under the Bharatiya Nyaya Sanhita, 2023, and the Information Technology Act, 2000. Investigators discovered that Syed Usman, Imran Basha, and their accomplices established an investment program branded as Hashpe, falsely marketing it as a cryptocurrency trading platform. They enticed investors with claims of high returns through a purported cryptocurrency named TCX, collecting funds via bank transfers, cryptocurrency, and cash.
To enhance the legitimacy of their scheme, the accused orchestrated a launch event and a car-awarding ceremony featuring Bollywood stars.
They further drew in investors by offering referral bonuses, advertising the scheme across social media, and hosting an event on a luxurious cruise ship in Mumbai.
Overall, an impressive total of Rs 146 crore was amassed from three primary sources: Rs 16 crore in cash deriving from illicit activities, Rs 10.52 crore deposited in a bank account registered under Hify Circle, and Rs 120 crore through the emission of TCX coins. Syed Usman and Dhamodharan were pivotal in gathering, organizing, and funneling the funds gained from these illegal endeavors.
Usman oversaw significant cash transactions and managed the Hify Circle bank account, which received investor funds. Dhamodharan was responsible for creating and administering the Hashpe platform, including its database and cryptocurrency functionalities, such as wallet operations.
The illicit funds found their way into the personal bank accounts of Syed Usman and Dhamodharan, as well as their family members and affiliated organizations. Some of the capital was also invested in cryptocurrencies and real estate. They utilized these funds to purchase cars for select investors, cover expenses for celebrity appearances, arrange lavish cruises and public events, offer gold gifts, and satisfy other extravagant personal costs.
On September 1, 2026, the ED conducted searches across 11 locations in Chennai, Coimbatore, and Kolkata. The two other suspects in this case, Imran Basha and Hitesh Kumar, are currently in judicial custody. The flow of funds demonstrated a clear pattern: aggressive marketing, fundraising from investors, routing through multiple accounts and wallets, and final allocation to personal assets and extravagant expenditures. Further investigations are ongoing.