New Delhi/Ernakulam: The Enforcement Directorate (ED) arrested two men from Kochi on Friday in connection with a money-laundering case linked to fraudulent loans provided through a Chinese app.

The accused, Sayid Muhammad, a Kozhikode native and Varghese T G, a Fort Kochi native, were taken into custody on Thursday, the federal agency said in a statement. In January, the ED arrested four persons from Tamil Nadu on charges of sending money illegally to Singapore as part of this case.

The money-laundering case stems from multiple FIRs filed by the Kerala and Haryana police departments on the complaints of certain victims, who said the money was "extorted" from them in the name of loan facilitation or through blackmailing.

The loan-app operators used to extort money from victims by adopting various methods, such as seeking advance monthly instalments and blackmailing, using private data hacked from mobile phones while installing the loan apps and threatening to share the victims' morphed obscene pictures with their contacts, according to the ED.

The agency claimed that on the instructions of loan-app fraudsters, the suspects arranged about 500 "mule" bank accounts, which got a credit of Rs 719 crore. This amount was generated from victims of the "loan-app scam", and they also arranged 26 cryptocurrency accounts on WazirX, a cryptocurrency-trading platform.

The duo were accused of "facilitating" cross-border remittances in the form of cryptocurrencies to the tune of Rs 115.67 crore to wallets based in foreign countries.

The accused were part of a "larger" international network that generated proceeds of crime from victims and remitted money outside India, the ED said. They received a remuneration of Rs 2 crore and Rs 70 lakh, respectively, for "arranging" mule (accounts used for money laundering) for bank accounts and WazirX crypto accounts, the ED added.

Money has also been remitted to Singapore through normal banking channels as well as through Nium India Private Limited, a cross-border remittance platform and a wholly-owned subsidiary of Nium Private Limited, Singapore, against the "fake" import of software or digital goods and services, it said. These loan apps are "controlled" by some Chinese persons, officials said.