Recently, certain crypto exchanges have faced legal raids. This is mostly because scams and phishing activities have increased rapidly in the crypto market. In fact, some crypto exchanges have also been found guilty of misleading users. Many nations across the globe have taken strict measures to deal with those exchanges that do not abide by the set rules. In India too, the legal authorities are dealing with the exchanges in a strict manner.
Recently, the agents of India’s Enforcement Directorate raided CoinSwitch Kuber. In fact, this is one of India’s biggest crypto exchanges. The authorities raided the exchange in relation to a money laundering probe to monitor 365 instant loan apps. The official report states that the agents of India’s Enforcement Directorate searched five offices of the exchange, forcibly. The report also states that there is also a possibility of multiple violations against FEMA, which might have occasioned the raid.
In fact, the Foreign Exchange Management Act regulates all incoming and outgoing transactions from India. However, CoinSwitch Kuber is not the only exchange to be raided by the Indian authorities. Earlier this month, WazirX was also raided. Therefore, it might also be a part of the Directorate’s investigations of several crypto exchanges. If you wish to know more about the incident, then this article is the perfect stop for you. Keep reading the article to know more about the raid.
India’s Top Exchange Raided
According to reports, the agents of India’s Enforcement Directorate raided five offices of CoinSwitch Kuber. They even froze all their assets amounting to around $8.13 million. There are also charges of money laundering against the exchange. The investigating authority found evidence of their connection to anomalous instant loan apps. In fact, this evidence was enough
For the directorate.
In addition, the investigating authorities also various other details of CoinSwitch Kuber, including the P2P transactions between accounts. The investigation also brought to the fore, very loose KTC protocols. The Economic Times reports that the investigation found that in around 80% of cases, the KYC protocols are “bogus or dubious”.
Cause Of Investigation
The directorate started the investigations including the crypto exchanges in India, after investigating the policies of the 365 instant loan apps. There are allegations that these apps charge high-interest rates at times. The connection between these apps and the crypto exchanges are in the fact that whenever these apps sense danger, they use these exchange to send money out of the country.
These loan apps buy crypto from these exchanges and transfer the crypto to other accounts. In this way, they move the money. In fact, in most cases, mainland China is the location of all these accounts.
The ED is conducting investigations of 10 major crypto exchanges. Therefore, it seems that the future of cryptocurrencies is endangered in India. However, even in such a scenario, there is a strong user base for cryptocurrency in India. But if such raids on crypto exchanges keep increasing, then the future of crypto in India remains dim.