India’s financial crimes unit has taken aim at yet another crypto firm in the country.
The Enforcement Directorate (ED) has reportedly accused CoinSwitch Kuber, one of India’s largest crypto exchanges, of violating India’s forex laws. The agency also investigated five CoinSwitch locations on Thursday.
An unnamed spokesperson told Reuters that the financial watchdogs seized financial documents, collected information about foreign trades, and checked its compliance practices, all based on the suspected forex violations.
CEO Ashish Singhal said that this was not a raid and “not about money laundering,” but an inquiry into how the exchange operated, enforced its Know Your Customer (KYC) requirements, and onboarded new customers.
“Most of their engagement with us has been about knowing what CoinSwitch does,” Singhal told Reuters. He added that the ED “has been engaged with us with respect to [the] functioning of our crypto platform and we are fully cooperating with them.”
There are many media reports doing the rounds about the recent engagement of ED Bangalore with @CoinSwitchKuber. So let me clear the air.
• First of all, the last few days’ events are not about money laundering or PMLA.
Here’s what is happening:
— Ashish Singhal (@ashish343) August 27, 2022
In July, Singhal spoke to Business Standard, an Indian publication, saying that the firm ensures “that crypto transactions are in the KYC framework.”
Investment behemoth Andreessen Horowitz led a funding round that granted CoinSwitch unicorn status last year. CoinSwitch is also backed by Sequoia Capital India and Coinbase Ventures, among others.
ED coming after Indian exchanges
This isn’t the first time India’s financial watchdog has cracked down on the country’s crypto industry.
On August 11, it was reported that the ED went after WazirX, another crypto exchange. The agency alleged that WazirX had sent over $130 million of unauthorized money to international exchanges, according to the Economic Times.
The agency announced a day later that it had frozen $46.4 million worth of assets from the Singapore-based crypto exchange Vauld due to alleged predatory lending practices.
Alongside these charges, the country recently passed a 30% tax on crypto-generated income. The hefty tariff has plummeted volumes on various exchanges, including WazirX, ZebPay, and CoinDCX.
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Source: https://decrypt.co/108397/indias-financial-watchdog-investigates-coinswitch-offices-report
