Indian anti-money laundering agency, Enforcement Directorate (ED), raided the premises of CoinSwitch Kuber, one of the largest local cryptocurrency exchanges, under the suspension of forex law violations.
The agency searched five premises linked to the crypto exchange, including office facilities and residences of directors and the CEO. CoinSwitch allegedly violated the Foreign Exchange Management Act (FEMA) with the acquisition of shares of over 20 billion rupees ($250 million).
According to Bloomberg, the exchange was found to be violating certain know-your-customer (KYC ) norms.
“We are looking into multiple possible contraventions under FEMA and other entities that are connected to it,” an ED official told the crypto-focused publication, Coindesk. “Since we did not receive the desired cooperation, we have conducted searches on (residences) of directors, the CEO, and the official premises.”
A Crypto Unicorn
The popularity of CoinSwitch exploded after the Indian Supreme Court decided against a banking ban on crypto platforms. The exchange is backed by Tiger Global, Sequoia and Coinbase Ventures, and it became a unicorn startup last year after an Andreessen Horowitz-led funding round.
“We receive queries from various government agencies,” a CoinSwitch spokesperson said in a statement sent to media platforms. “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 latest ED action against a crypto exchange is not the first in India. Earlier this month, the anti-money laundering agency froze $8.2 million worth of assets linked to WazirX, another major Indian crypto exchange, for its connection to illegal instant lending apps and raided one of its directors.
Moreover, WazirX received a notice earlier for alleged forex law violations involving digital currencies worth 27.9 billion rupees ($382 million). Furthermore, the agency took action against Vauld, a troubled Singapore-based crypto lender, and froze nearly $46 million worth of assets.
