The Executive Directorate (ED) of India has conducted searches at five premises associated with popular cryptocurrency trading platform Coinswitch Kuber. The company has stated that its involvement with ED is not related to the money laundering investigation. Federal agencies recently froze the assets of two other crypto companies, Wazirx and Vauld.
Kuber, the next coin switch on ED’s list, is
The Enforcement Directorate (ED), the Indian government’s law enforcement and economic intelligence agency, conducted searches at five locations related to popular crypto trading platform Coinswitch Kuber on Thursday.
The cryptocurrency trading platform is backed by a number of global venture capital firms, 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. One of India’s largest cryptocurrency exchanges, the platform achieved unicorn status last year.
Ashish Singhal, CEO of Coinswitch Kuber, joinedTwitter on Saturday to explain the situation. He stressed that his company’s involvement with ED Bangalore “is not about money laundering or PMLA (Prevention of Money Laundering Act).” He stated clearly that it is not.” Enforcement Directorate – Bengaluru has engaged with us regarding the functioning of our crypto platform/exchange. We are fully cooperating with them.”
“As an industry leader in India and one of the most compliant crypto platforms, we are engaged in constructive dialogue with various stakeholders to ensure that our business model, best compliance practices understanding and thereby gaining greater clarity on such issues,” the CEO tweeted.
According to Bloomberg, ED searched the office facility and residence of the director and CEO of the Bengaluru-based crypto exchange. Citing a person familiar with the matter, the publicationadded that the trading platform, without providing details, is suspected of acquiring shares worth more than 20 billion rupees ($250 million) in violation of the country’s foreign exchange laws
The Economic Times (ET) reported that the search was related to money laundering. It said, “Investigators found that they were in violation of Section 11(a) of the PMLA law. This law requires all reporting entities to verify the identity of their customers and beneficiaries,” the publication explained, citing an official involved in the investigation. This person further stated that “the investigation revealed that in over 80% of the cases their (KYC) was either bogus or suspicious.”
The news outlet recently reported that ED is investigating at least 10 cryptocurrency exchanges on suspicion of laundering more than 1,000 clones identified as criminal proceeds raised by the 365 Instant Loan app.
Earlier this month, ED conducted a search against one of the directors of Zanmai Labs, which owns the cryptocurrency exchange Wazirx. Subsequently, authorities issued an order freezing more than $8 million in bank assets of the crypto exchange. A week later, the ED froze the crypto and banking assets of Vauld, a crypto trading and lending platform backed by Peter Thiel, totaling more than $46 million.
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