Crypto Exchange CoinSwitch Kuber Raided by Indian Law Enforcement Officers
Crypto exchanges that break the rules are seriously dealt with by Indian law enforcement authorities.
One of India’s largest crypto exchanges has been raided by officers from the country’s Law Enforcement Branch. The raid was due to a money laundering investigation to monitor 365 instant loan applications.
According to the official report, five offices linked to CoinSwitch Kuber were forcibly searched as part of the investigation.
The report also mentions multiple possible violations against FEMA or the Foreign Exchange Management Act. This act regulates all inbound and outbound transactions from India.
The recent raid is believed to be part of the Directorate’s investigations into several other companies. WazirX, also a well-known crypto exchange in India, was also attacked earlier this month.
India’s top crypto exchange raided
The agency stormed five locations linked to WazirX and then froze all of their assets. All $8.13 million to be exact. Management accused WazirX of money laundering, evidence being their links to anomalous instant loan apps.
The Enforcement Branch investigated P2P transactions between accounts and other Coinswitch Kuber details.
The investigation led to key documents relating to inflated liquidity and very relaxed know-your-customer (KYC) protocols in CoinSwitch Kuber. According to a report by Economic Times, the survey found that their KYC protocols are “fake or questionable in 80% of cases”.
These raids are part of the ongoing investigation into ten crypto exchanges linked to money laundering charges. However, the exchanges also claimed that they follow applicable KYC laws despite not having created an STR or suspicious transaction report.
Image: Coincu News
Loan sharks and loan applications in India
The agency’s interest in these instant loan apps came from the policies of the 365 instant loan apps under investigation. They often charge very high interest rates and they also often do so through so-called “tele-callers”.
With that in mind, the agency also shared its alleged modus operandi. Once the lending app notices they’re 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 suspected money laundering accounts are often located in mainland China.
The future of crypto looks very bleak in India as the ED continues its investigations against 10 of the most popular exchanges in the region.
On a positive note, even when these raids took place, the crypto still has a large user base in India.
The Indian province of Telangana has launched the India Blockchain Forum. This forum aims to make 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