India’s Enforcement Directorate (ED) has conducted searches at five premises linked to popular cryptocurrency trading platform Coinswitch Kuber. According to the company, its search of five premises linked to Coinswitch Kuber’s popular cryptocurrency trading platform was not connected with any money laundering investigation. Two other crypto-firms were also frozen by the federal agency, Wazirx & Vauld.
Coinswitch Kuber Next on ED’s List
On Thursday, India’s Enforcement Directorate (ED), the economic intelligence and law enforcement agency of India, conducted searches in five areas that were connected to Coinswitch Kuber.
Global venture capitalists include Andreessen Horowitz (A16z), Tiger Global Ventures, Coinbase Ventures, Sequoia Capital, and Coinbase Ventures. 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.
Ashish Singhal (Coinswitch Kuber CEO) took to Twitter explainSaturday was a good day for the company. He stressed that his company’s engagement with the ED Bangalore is “not about money laundering or PMLA [Prevention of Money Laundering Act].” He 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.
Bloomberg reported that the ED searched the office and home of both the chief executive officer and director of the Bengaluru-based bitcoin 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.
According to The Economic Times, the search was 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.”
According to a news source, the ED has been investigating at least 10 cryptocurrency exchanges in relation to alleged laundering of more than 1,000 crore rupees. This is alleged as proceeds from crime that were raised through 365 instant loans apps.
The ED carried out searches earlier this month on Zanmai Labs’ director. This company owns the cryptocurrency exchange Wazirx. After conducting a search on one of Zanmai Labs’ directors, the authority issued an order freezing $8 million worth of crypto exchange bank assets. The ED then frozen crypto assets and bank assets totaling over $46 million of Peter Thiel-backed cryptocurrency trading platforms Vauld and lending platform Vauld a week later.
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