3 Indian crypto exchanges on investigators’ radar for $3.5 billion in illegal drug transactions

Indian investigative agencies are probing three crypto exchanges for their roles in illegal drug trade transactions after they were tipped off by the Financial Intelligence Unit (FIU), which has reached nearly 200 such transactions.

These financial transactions for suspected drug deals in Nigeria, the Cayman Islands and the British Virgin Islands were allegedly conducted through three Indian digital asset management companies, a report in the Economic Times said.

Illegal drug transactions

The Enforcement Directorate (ED) and the Income Tax department, among other agencies, are investigating the case.

“Digital currency was used to buy and sell medicines and some of these companies have facilitated it…So far, the agency has been able to trace transactions worth Rs 28,000 crore [$3.5 billion]”, the Economic Times quoted an unnamed senior official as saying.

A majority of these transactions were conducted through these three crypto firms and were not reported to authorities, investigators believe.

According to the media coverage, these transactions which took place between 2019 and 2022 came to light after several drug traffickers were arrested by the Hyderabad Narcotics Enforcement Wing. They used to operate on the Dark Web and use crypto for payments.

The FIU is a national agency that receives all suspicious financial transaction reports from Indian investigative agencies and cooperates extensively with law enforcement agencies internationally to investigate terror and drug financing.

Look at the Dark Net and Crypto

India’s Home Minister Amit Shah said last week at a high-level meeting on drug trafficking and national security that cases of drug trafficking through the dark web and cryptocurrencies have increased in recent years.

In recent months, Indian investigative agencies have been proactively chasing fraud and wrongdoing in the local crypto space. Early this month, the ED raided several premises linked to accused in a gaming app scam and recovered cash and bitcoins, which were frozen.

In August, the ED searched the office and residences of CoinSwitch Kuber’s top executives, including the directors and CEO, for suspected violation of foreign exchange rules. Earlier, it was reported that the ED was investigating 10 private companies for laundering $125 million.