Major Indian crypto exchange CoinSwitch Kuber had up to five of its premises searched by anti-money laundering agents on August 25 over alleged violations of forex laws.
Based on the report from Bloomberg, India’s Enforcement Directorate searched CoinSwitch Kuber’s offices and the residences of its directors and CEO Ashish Singhal. The Andreessen Horowitz-backed crypto exchange has become the latest on the Enforcement Directorate’s anti-money laundering hit list.
A source told the publication the cryptocurrency exchange is under suspicion of buying shares worth over $250 million in contravention of forex laws and being non-compliant with certain know-your-customer (KYC) needs.
The Directorate of Enforcement is a federal enforcement and intelligence agency and is operating under the Ministry of Finance. Based on its website, the agency’s key objective is the enforcement of acts like the Foreign Exchange Management Act and the Prevention of Money Laundering Act.
CoinSwitch Kuber said in a statement:
“We receive queries from various government agencies. Our approach has always been that of transparency. Crypto is an early stage industry with a lot of potentials and we continuously engage with all stakeholders.”
Unleashed in India in 2020, CoinSwitch Kuber is one of the biggest crypto exchanges in India alongside CoinDCX and WazirX with more than 18 million registered users. CoinSwitch Kuber reached “unicorn” status in 2021 after raising $260 million in a Series C funding round spearheaded by Coinbase Ventures and Andreessen Horowitz. The firm is also backed by Ribbit, Sequoia, Paradigm, and Tiger Global.
The actions follow a continued clampdown on the crypto space in India.
Earlier this month, Enforcement Directorate froze nearly $8.1 million in funds from the WazirX crypto exchange, claiming that the exchange facilitated transactions by unnamed fintech companies “to purchase crypto assets and then launder them abroad.”
Buy Bitcoin NowThis year has also seen the government introduce two new rules and regulations demanding some crippling taxes on crypto-related unrealized profits and transactions.
In a recent survey conducted with 2042 India crypto investors by crypto exchange KuCoin, 33% of survey respondents noted they were worried due to ambiguous government regulations that may deter possible investors from cryptocurrency.
