The Norwegian Enforcement Agency is investigating large Indian crypto exchanges. Is your money safe?
An interdisciplinary organization, ED, has a mandate to enforce actions such as FEMA, the Money Laundering Prevention Act (PMLA) and the Fugitive Economic Offenders Act (FEOA), which routinely investigates cases or businesses that fall within the scope of these laws. .
Alerts have been sent to leading crypto exchanges, CoinDCX and CoinSwitch, and certain executives at both companies to understand transaction information and data on how these platforms work.
Based on the statements issued by CoinDCX, all relevant information has been satisfactorily shared with the authorities, and insists that they continue to comply with all statutory requirements applicable to trading in virtual assets.
As part of a larger investigation into the crypto-assets company, ZebPay was reprimanded for violating currency laws last year, the activities of major crypto exchanges in the country are being investigated in an attempt to weed out any further breaches.
So far, the alerts have seemed to be procedural, and crypto investors trading on other crypto exchanges have no reason to be intimidated.
However, just as the Singapore-based cryptocurrency lending platform Vauld suspended all withdrawals, trades and deposits on its platform earlier this month, Indian crypto exchanges such as CoinDCX also restricted multiple deposits and withdrawals to multiple users with regard to compliance, risk and monitoring requirements.
By attributing the limitation to evolving regulatory requirements, the jury is still out on what has prompted the cryptocurrency exchange to take such sudden and drastic steps.
A significant reduction in trading volume could also have contributed to these actions, especially in light of the fact that many leading crypto companies such as Celsius Network took similar measures due to extreme market conditions.
While crypto investors in the country are understandably disturbed by this latest development, it is important to note that many domestic crypto exchanges have a self-regulatory framework in place and have handled matters in a transparent manner.
When it comes to protecting investor wealth, crypto exchanges act as platforms for executing transactions, and the most secure ones store all customer symbols in a separate custodian wallet.
This gives investors the exclusive title, rights and ownership of all their cryptocurrency holdings, and provides a degree of security in the event of malicious attacks on these virtual trading platforms.
In addition, many crypto exchanges have secured themselves against financial damage as a result of cyber fraud, which gives their customers even more security than is currently required.
An inherently complex technology for the layman, blockchain technology and cryptocurrencies undoubtedly revolutionize how token holders and businesses trade with each other.
Crypto is still in the early stages of the development cycle, with a regulatory framework still under the cryptocurrency and the regulation of official digital currency law for all crypto-related activities in India.
Despite the groundbreaking innovations caused by the blockchain and crypto industries, crypto exchanges continue to be in the spotlight as governments around the world continue to engage and consider with them to understand the various nuances of the work.
In India, most crypto platforms have already put in place self-regulatory frameworks that are meant to look for bad players and take immediate action to ensure the platform and investor safety.
Crypto-investors in India would do well to understand the terms and conditions of the wallet in which their holdings of cryptocurrency are maintained.
If the wallet is kept separate from the platform’s own wallet, there is no need to worry since the owner of all the tokens remains with the wallet owner.
That said, it is advisable to perform transactions on crypto exchanges that have an exemplary track record, that follow high standards of disclosures and robust KYC mechanisms, and adhere to their code of conduct in the event of mala fide transactions.
