SUMMARY
The ED is looking into multiple possible contraventions under FEMA: Report
Our approach has always been that of transparency. Crypto is an early stage industry with a lot of potential and we continuously engage with all stakeholders: Coinswitch
After WazirX and Vauld, Coinswitch is the third major company to be raided and investigated by the ED
After WazirX, it appears that the Enforcement Directorate (ED) has now landed on the doorsteps of another cryptocurrency exchange Coinswitch Kuber.
According to CoinDesk, the ED searched five premises related to Coinswitch Kuber in a case pertaining to alleged flouting of the Foreign Exchange Management Act (FEMA) norms by the crypto exchange.
“We are looking into multiple possible contraventions under FEMA and other entities that are connected to it…Since we did not receive the desired cooperation we have conducted searches on (residences) of directors, the CEO and the official premises,” a source was quoted as saying.
As reports of raids emerged, a Coinswitch spokesperson told IANS, “Our approach has always been that of transparency. Crypto is an early stage industry with a lot of potential and we continuously engage with all stakeholders.”
The move is part of a larger crackdown by the ED on major cryptocurrency exchanges. Earlier, reports had emerged that the agency was probing more than 10 crypto exchanges for allegedly laundering money to the tune of INR 1,000 Cr.
Earlier this month, the ED also conducted searches at premises linked with one of the directors of WazirX and froze bank assets worth INR 64.67 Cr. The aftermath saw a bitter battle between Cayman Islands-based crypto exchange Binance and WazirX over the ownership of the latter.
Binance claimed that while it had announced acquisition of WazirX in 2019, the deal never went through and it holds no stake in Zanmai Labs, the parent company of WazirX.
The ED is also separately investigating WazirX and Binance for allegedly violating FEMA norms.
Later, the ED also took action against the beleaguered crypto startup Vauld and froze assets amounting to INR 370 Cr lying with the company’s Indian entity following raids at various premises belonging to Bengaluru-based Yellow Tune Technologies.
Subsequent investigation into the matter revealed that 23 fintech firms and NBFCs diverted funds to the tune of INR 370 Cr into the ‘INR wallets’ of Yellow Tune, hosted with Vauld’s Indian entity. The ED also accused Vauld’s India entity of money laundering.
Another cryptocurrency exchange Bitbns has also been in the dock for delaying user withdrawals, with the platform blaming ‘relevant authorities’ for the issues.
A host of cryptocurrencies have been under stress amidst the ongoing crypto winter. From an all-time high of $69,000 in November last year, Bitcoin is currently trading at $21,544.70, wiping off more than 68% of investor wealth in the process.
In the Indian context, a high exposure to Terra Luna and the cryptocurrency’s subsequent crash left many exchanges fumbling as more and more users sought withdrawals.
