ed probe: ED messages to the best krypton sites seek information under FEMA
ED has sent out messages to cryptocurrency exchanges to seek further information under the Foreign Exchange Management Act (FEMA), they added.
The crypto-trading platform CoinDCX’s founder Sumit Gupta joined the federal agency’s investigation at the Bengaluru office earlier this month, sources said.
Managers at other crypto exchanges, including the crypto-trading platform CoinSwitch Kuber, were also called in, and the exploration agency sought information on certain transactions, said at least two people familiar with the development to ET.
Under FEMA, payments made to any person outside India or receipts from them, along with currency agreements and foreign security, are limited.
The aim of the law is to facilitate external trade and payments and to promote the orderly development and maintenance of the foreign exchange market in India.
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“Transaction history, relation to foreign stock exchanges, how much money goes out of India – ED investigates all details of offshore transactions,” said an official.
“Information has been sought from the stock exchanges, and in some cases their leaders have also joined the investigation. The documents are being examined, and if necessary they can be called back, the official added.
Several agencies, including the income tax department, are investigating crypto firms.
In June last year, ED had asked India’s largest cryptocurrency exchange in volume, WazirX, to explain transactions worth Rs 2,790.74 crs involving cryptocurrencies that are allegedly in breach of FEMA rules.
ED is among the central agencies, including the Narcotics Control Bureau (NCB) and the IT department, which have written to the government over alleged misuse of crypto, especially in the field of commercial money laundering (TBML).
“Recently, in one of the cases, we found cases of using hawala and crypto in TBML. This e-hawala route using crypto offers an opaque structure that makes it almost difficult to find both the source and the recipient,” said an official knowledgeable about the development.
“The Hawala (route) is run by the Dawood Ibrahim gang. So we see that the e-hawala network is used by the D-Gang a lot, “the official added.
CoinDCX said it would comply with existing laws and cooperate with regulators.
“As we understand, ED has sent messages to major stock exchanges in India to seek information and data on how platforms work. As needed, we have shared all necessary information to the satisfaction of the department, and no subsequent action awaits our end,” said a spokesman. for CoinDCX.
ET reported on June 23 that CoinDCX, which is supported by Coinbase Ventures, had stopped its cryptocurrency withdrawal function – without prior communication to customers – since May. At about the same time, the stock exchange also enforced stricter know your customer (KYC) standards.
– We receive inquiries from various public agencies. Our approach has always been transparency. “Crypto is an early-stage industry with a lot of potential, and we are constantly engaging with all stakeholders,” said a CoinSwitch Kuber spokesperson.
A spokesman for WazirX told ET that the company has moved the Karnataka High Court to seek temporary relief.
In a ruling last month, the Supreme Court had allowed the summons to be postponed, provided that the company must submit documents or information as desired within fourteen days.
“… The case is pending before the Karnataka High Court where the company and its director have filed a lawsuit and the court has passed a temporary ruling. We have complied with the order. WazirX is not the only stock exchange to have received such a summons, the spokesman said. .
