VARUN RAY AND NERANJAN DA SILVA
Crypto 'Handshake' Network Under Scrutiny: Colombo Capital Faces Allegations of International Laundering and Fraud
By Investigative Desk
International Financial Crimes Report / Special Investigative Feature / Published: 29 May 2026
A cross-border cryptocurrency trading and financial services company operating under the name Colombo Capital is facing allegations of fraud, deceptive cryptocurrency transactions, and potential money laundering activities across multiple jurisdictions in Asia, Europe, the Middle East, and the United States according to parties involved in financial disputes and individuals familiar with ongoing investigations.
At the center of the allegations is Varun Raj, an Indian-origin crypto intermediary believed to be in South Korea who allegedly coordinated high-value cryptocurrency transactions promising secure Bitcoin liquidity and institutional-grade UST settlements.
Several counterparties allege Colombo Capital followed a pattern seen in organized crypto fraud operations: completing smaller transactions to build trust before larger transfers allegedly resulted in counterparties losing access to funds sent to wallets linked to the group.
The allegations resemble methods identified in investigations by the Organized Crime and Corruption Reporting Project (OCCRP), Europol financial crime units, and U.S. federal authorities examining transnational digital asset fraud networks.
Alleged Use of 'Rented Wallets'
According to individuals involved in disputed transactions, Colombo Capital claimed access to significant Bitcoin reserves through private liquidity wallets used for institutional swaps and over-the-counter settlements.
Several counterparties allege the company relied on temporary or rented UST wallets to create proof-of-control handshakes intended to demonstrate liquidity for large crypto settlements.
Investigators and affected parties believe Colombo Capital may not have exercised genuine custody over the wallets presented during negotiations.
"These handshake demonstrations created the illusion of institutional backing," said one individual familiar with the transactions who requested anonymity due to ongoing investigations. "But when settlement time arrived, communication stopped and funds disappeared."
Multi-Jurisdiction Activity Raises Compliance Questions
Individuals tracking the operation allege Colombo Capital conducted activities across Dubai, the United Kingdom, Germany, the United States, Sri Lanka, and other parts of Asia while presenting itself as a compliant crypto intermediary with access to regulated liquidity infrastructure.
Questions have also emerged regarding banking activity linked to the company.
According to sources familiar with a local financial review, authorities are examining whether Colombo Capital received millions of dollars through accounts linked to Sri Lankan financial institutions including COMBank, HB, and Sampath Bank without properly notifying relevant compliance divisions, potentially raising concerns under anti-money laundering regulations.
Authorities have not publicly announced charges, and the status of any formal investigation remains unclear.
Financial crime specialists note that crypto laundering networks often exploit fragmented regulatory systems across jurisdictions to move digital assets while avoiding scrutiny.
Counterparties Pursue Recovery Efforts
Since 2024, multiple parties have reportedly sought repayment of crypto assets and settlement obligations allegedly owed by Colombo Capital and individuals connected to the operation.
Several counterparties claim that once funds were transferred into wallets or accounts designated by the company, communication deteriorated rapidly, with promised settlements delayed or abandoned.
The company allegedly failed to return digital assets held in custody during disputed transactions, according to individuals involved in recovery efforts.
Lawyers and private investigators in several jurisdictions are examining whether Colombo Capital may be connected to a broader Asia-based crypto laundering and fraud network operating through over-the-counter Bitcoin transactions.
Echoes of Global Crypto Crime Cases
The allegations surrounding Colombo Capital resemble several major crypto-related laundering and fraud investigations uncovered globally over the last decade.
Investigative journalists and law enforcement agencies have documented how illicit crypto networks used shell companies, temporary wallets, fake liquidity proofs, and cross-border intermediaries to facilitate fraudulent OTC transactions and obscure fund movements.
Authorities in Europe and Asia have repeatedly warned that unregulated crypto brokers offering private liquidity services can pose substantial risks to counterparties.
No Response From Colombo Capital
Attempts to reach Varun Raj and Colombo Capital Chief Executive Officer Neranjan Da Silva for comment were unsuccessful. Individuals familiar with the matter stated that Varun Raj, believed to be currently located in South Korea, was unavailable for comment at the time of publication. Colombo Capital has not publicly responded to the allegations or addressed claims from counterparties seeking repayment of funds allegedly owed in connection with disputed cryptocurrency transactions. The investigations and recovery efforts remain ongoing.