Coinswitch, one of the largest crypto exchanges in India, became the latest entrant to the list of beleaguered entities being probed by the agencies and tax officials like the Enforcement Directorate this week. There is no end to the troubles of cryptocurrency exchanges operating in India as they continue to face the scrutinyof central government agencies and tax investigators.
Ashish Singhal, CEO of Coinswitch, took to Twitter for the first time to allay the fears of investors and the crypto community after the searches at Coinswitch Kuber pertaining to its money laundering inestigation into the instant micro loan app scam this week.
Coinswitch has more than 18 million registered users and is valued at $1.9 billion. It is backed by Tiger Global, Andreessen Horowitz, and Coinbase Ventures. Coinswitch is the third exchange after Flipvolt and WazirX (the Indian arm of crypto exchange Vauld) to be probed by the central agency, which is investigating at least 10 cryptocurrency exchanges for laundering more than Rs 1,000 crore.
The money has been recognized as proceeds of crime of the firms accused under investigation in the instant loan app case and almost all of them have a link to China.
The probe has discovered instances of the accused firms approaching the exchanges to purchase crypto coins for more than Rs. 100 crore and crypto coins being transferred to international wallets. Further, these exchanges did not carry any enhanced due diligence and even failed to present suspicious transaction reports (STRs).
On further probe in the money laundering probe, the Enforcement Directorate allegedly recovered over Rs 800 crore proceeds of crime against 365 fintechs and their non-banking financial companies (NBFCs) partners.