India’s Enforcement Directorate (ED) has conducted searches at five premises linked to popular cryptocurrency trading platform Coinswitch Kuber. The company says its engagement with the ED was not related to any money laundering inquiry. The federal agency recently froze the assets of two other crypto firms, Wazirx and Vauld.
Coinswitch Kuber Next on ED’s List
The Enforcement Directorate (ED), the law enforcement and economic intelligence agency of the government of India, carried out searches at five locations linked to popular crypto trading platform Coinswitch Kuber Thursday.
The cryptocurrency trading platform is backed by a number of global venture capitalists, including Andreessen Horowitz (A16z), Tiger Global, Coinbase Ventures, and Sequoia Capital. Coinswitch claims to be India’s largest crypto app, with over 18 million registered users. The platform, which is one of India’s largest cryptocurrency exchanges, achieved unicorn status last year.
Coinswitch Kuber CEO Ashish Singhal took to Twitter to explain the situation Saturday. He stressed that his company’s engagement with the ED Bangalore is “not about money laundering or PMLA [Prevention of Money Laundering Act].” I have clarified: “Enforcement Directorate – Bengaluru has been engaged with us with respect to functioning of our crypto platforms / exchanges. We are fully cooperating with them.”
“As an industry leader in India and one of the most compliant crypto platforms, we have been engaged in constructive dialogues with various stakeholders to help them understand our business models, best compliance practices, thereby bringing more clarity on such matters,” the CEO tweeted .
According to Bloomberg, the ED searched office facilities and residences of directors and the CEO of the Bengaluru-based crypto exchange. Citing a person with knowledge of the matter, the publication added without providing specifics that the trading platform is under suspicion of acquiring shares worth over 20 billion rupees ($250 million) in violation of the country’s forex laws.
The Economic Times (ET) reported that the searches were related to money laundering. “The agency has found them to be in violation of section 11 (A) of the PMLA Act, which requires every reporting entity to verify the identity of its clients and the beneficial owner,” the publication described, citing a source privy to the investigation . The person added: “The probe has found their (KYC) to be either bogus or dubious in more than 80% of the cases.”
The news outlet recently reported that the ED is probing at least 10 cryptocurrency exchanges for allegedly laundering more than 1,000 crore rupees identified as proceeds of crime raised by 365 instant loan apps.
Earlier this month, the ED conducted searches on one of the directors of Zanmai Labs, which owns cryptocurrency exchange Wazirx. The authority subsequently issued an order freezing more than $8 million in bank assets of the crypto exchange. A week later, the ED froze crypto and bank assets of Peter Thiel-backed crypto trading and lending platform Vauld totaling more than $46 million.
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