CoinSwitch Kuber, one of the biggest crypto exchanges in India, was reported to face a raid by the Directorate of Enforcement (ED) earlier this week over being allegedly involved in a money laundering scam based on instant micro-loan apps. However, on Saturday, the platform's CEO Ashish Singhal denied that the ED visit to its Bengaluru offices was not related to money laundering or Prevention of Money Laundering Act, 2002 (PMLA). He clarified in a tweet thread that the ED has been engaged with CoinSwitch Kuber "with respect to functioning of our crypto platforms/exchanges. We are fully cooperating with them."
"As an industry leader in India and one of the most compliant crypto platforms, we have been engaged in constructive dialogues with various stakeholders to help them understand our business models, best compliance practices, thereby bringing more clarity on such matters," Singhal clarified. Earlier media reports, based on source inputs, said that five premises linked with CoinSwitch Kuber were probed in connection with ED’s money laundering probe into instant micro-loan apps. Singhal's latest clarification denies all such reports.
Earlier this month, the ED froze assets worth Rs 64.67 crores of Mumbai-headquartered crypto exchange WazirX. The law enforcement agency also searched director Sameer Mhatre. Nischal Shetty, another director of WazirX, is said to be in the UAE.
The ED said that when the crackdown began, loan app firms “used the cryptocurrency route to take money out of the country.” The agency said that most of the money was transferred to Hong Kong in the form of crypto assets purchased via WazirX. “We found evidence regarding the transfer of money to crypto assets.”
Commenting on the searches, the agency said that they are “insignificant” as most of the data is “on the cloud and employees work from home.”
In case of another crypto platform Vauld, it was said that a shell entity called Yellow Tune Technologies Pvt. Ltd. was used to launder proceeds of crime using its wallets.
Editor's note: This report has been updated on August 27 (3:22pm) to accommodate CoinSwitch Kuber CEO Ashish Singhal's clarification on the reason behind the ED visits.
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