Crypto Exchange CoinSwitch Kuber Attacked by Agents of India’s Enforcement Directorate
Crypto exchanges that do not follow the rules are severely dealt with by India’s law enforcement authorities.
One of the largest crypto exchanges in India has been raided by agents from the country’s Enforcement Directorate. The raid was due to a money laundering investigation to monitor 365 instant loan apps.
According to the official report, five offices linked to CoinSwitch Kuber have been sued in connection with the probe.
The report also mentioned possible additional violations of FEMA or the Foreign Exchange Management Act. This Act regulates all incoming and outgoing transactions from India.
The recent raid is suspected to be part of the directorate’s investigations into several other companies. WazirX, also a well-known crypto exchange in India, has also been raided earlier this month.
Top Indian Crypto Exchange Raid
The agency raided five locations linked to WazirX and then froze all their assets. Everyone 8.13 million dollars to be precise. The directorate accused WazirX of money laundering, with the evidence linking them to abnormal instant loan apps.
The Enforcement Directorate investigated the P2P transactions between accounts and other details of Coinswitch Kuber.
The investigation led to key documents related to inflated liquidity and very relaxed know-your-customer (KYC) protocols in CoinSwitch Kuber. According to a report by the Economic Times, the probe found that their KYC protocols are “fake or dubious in 80% of cases.”
These raids are part of the ongoing investigation into ten crypto exchanges linked to allegations of money laundering. However, the exchanges have also claimed that they are following the current KYC laws despite not creating an STR or suspicious transaction report.
Image: Coincu News
India’s loan sharks and loan apps
The agency’s interest in these instant loan apps stemmed from the policies of the 365 instant loan apps under investigation. They often demand very high interest rates, and they also often do so through so-called “telecallers”.
With this in mind, the agency also shared their alleged modus operandi. When the loan app notices that they are under the radar, they use the exchanges to move the money out of the country.
They move it by buying crypto through these exchanges and transferring the crypto to another account. Most of these alleged money laundering accounts are often located in mainland China.
The future of crypto seems very dim in India as the ED continues its investigations against 10 of the most popular exchanges in the region.
On a positive side note, even when these raids happened, crypto still has a large user base in India.
The Telangana province of India has launched the India Blockchain Forum. This forum is aimed at making India the center of Web 3.0 development in the world.
BTC total market cap at $410 billion on the daily chart | Source: TradingView.com
Featured image from Janam TV, chart from TradingView.com
