ED Raids Indian Exchange CoinSwitch Kuber Over Alleged Money Laundering
- ED raided five premises tied to CoinSwitch Kuber over alleged Foreign Exchange Management Act violations.
- CoinSwitch is suspected of acquiring shares worth over $250 million in violation of forex laws and KYC regulations.
On Thursday, India’s Enforcement Directorate searched five premises tied to crypto exchange CoinSwitch Kuber over alleged Foreign Exchange Management Act (FEMA) violations. Reportedly, ED also raided the residences of CoinSwitch directors and CEO Ashish Singhal.
According to sources, CoinSwitch is suspected of acquiring shares worth over $250 million in contravention of forex laws and violating certain know-your-customer (KYC) requirements. ED is looking into “multiple possible contraventions under FEMA and other entities that are connected to CoinSwitch.”
Commenting on ED raids, a CoinSwitch Kuber spokesperson said, “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 potential, and we continuously engage with all stakeholders.”
In July, top executives of CoinSwitch, including Chief Business Officer Sharan Nair and the company’s Chief Financial Officer and senior executive Krishna Hegde, left the firm, stating that they wanted to start their ventures.
Recently, ED has been doubling down on companies it suspects to have violated anti-money laundering laws. CoinSwitch had received a summons from the ED office in July, “seeking certain information/documents. “
As many as ten crypto exchanges are under the ED radar for their alleged involvement in money laundering of nearly Rs 10 billion. The agency recently froze crypto lending platform Vauld’s bank assets worth Rs 370 crore over its “predatory lending practices.”
ED also raided the offices of Zanmai Labs, the operating agency of India’s largest crypto exchange WazirX and issued an order to freeze roughly $8.1 million in funds, alleging that the crypto exchange facilitated transactions by unnamed fintech firms “to purchase crypto assets and then launder them abroad.”
In October 2021, CoinSwitch Kuber raised $260 million in a Series C funding round led by Coinbase venture capital arm Coinbase Ventures and Andreessen Horowitz. The company is also backed by big names in the industry, including Sequoia, Paradigm, Ribbit, and Tiger Global.