Local Regulators Are Investigating 3 Indian Crypto Exchanges
- Indian investigation agencies, including the Enforcement Directorate (ED) and Income Tax Department, are reportedly probing three crypto exchange platforms.
- The authorities are investigation the exchanges for their involvement in illegal drug trade transactions linked to Nigeria, the Cayman Islands, and the British Virgin Islands.
- The Hyderabad Narcotics Enforcement Wing’s arrests of multiple drug traffickers allowed for the uncovering of these transactions.
While Indian financial regulators are constantly working on bringing a solid regulatory framework for the crypto industry, the entities with a criminal mindset make headlines every now and then.
After receiving alerts from the Financial Intelligence Unit, Indian investigation agencies, including the Enforcement Directorate (ED) and Income Tax Department, are reportedly probing three crypto exchange platforms for their involvement in illegal drug trade transactions, which are suspected to be linked to Nigeria, the Cayman Islands, and the British Virgin Islands.
According to a recent report by the Economic Times, three Indian digital asset management companies allegedly carried out these transactions for suspected drug deals. The report quoted an unnamed senior government official, who stated:
“Digital currency was used to buy and sell drugs and some of these companies facilitated it…So far the agency has been able to track transactions worth Rs 28,000 crore [$3.5 billion].”
Investigators believe that a majority of the transactions related to these illegal drug deals were carried out through three crypto companies, which did not report anything to the authorities.
According to media reports, the Hyderabad Narcotics Enforcement Wing’s arrests of multiple drug traffickers allowed for the uncovering of these transactions, which took place between 2019 and 2022. They used to conduct business on the Dark Web and accept cryptocurrency as payment.
The FIU is a national agency that accepts all reports of dubious financial activities from Indian investigative agencies and works closely with law enforcement organizations around the world to look into illegal drug sales and terrorist financing.
Amit Shah, the home minister of India, stated last week at a high-level meeting on drug trafficking and national security that there have been more instances of drug smuggling through cryptocurrency and the dark net recently.
Indian law enforcement has been aggressively chasing frauds and other wrongdoings in the local cryptocurrency market over the past few months. The ED raided multiple locations linked to the suspect in a gaming app scam early this month and retrieved cash and bitcoins that were frozen.
In August this year, the ED searched local crypto exchange CoinSwitch Kuber’s office and the homes of its top executives, including CEO and directors, for alleged violations of foreign exchange regulations. Interestingly, the revenue enforcement agency also probed major crypto exchange WazirX for its alleged role in money laundering activities. In addition, the ED recently investigated ten companies for a $125 million money laundering case.
India has also become the land for crypto and Web3 adoption as recently, a report revealed that the Asian country has the world’s third-largest Web3 workforce.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
