Crypto Money Laundering: ED Attaches Exchanges' Assets Worth Rs 906 Cr Under PMLA
Further investigation is said to be under process in eight cases and four cases are closed on payment of tax along with interest and penalty.
The Enforcement Directorate (ED) has attached proceeds of crime worth Rs 907 crore and arrested three individuals in connection with multiple money laundering investigations involving crypto exchanges, the Government informed Parliament on Monday.
Minister of State for Finance Pankaj Chaudhary stated that Central GST officers had also detected Goods and Services Tax (GST) evasion of Rs 87.60 crore across 12 crypto exchanges. A recovery of Rs 110.97 crore, including interest and penalties, has already been made.
Multiple Exchanges Under PMLA Lens
In a written reply to the Lok Sabha, Chaudhary said the ED is investigating several cases of crypto-related fraud, with some involving crypto exchanges allegedly engaged in money laundering activities.
"As on December 14, 2022, proceeds of crime amounting to Rs 907.48 crore have been attached/seized, three persons have been arrested, and four prosecution complaints have been filed before the Special Court, PMLA, in these cases," the minister said.
However, the Government did not specify the names of the exchanges involved in the Rs 907 crore attachment under PMLA.
Zanmai Labs Action Under FEMA, Not PMLA
Separately, in the case of Zanmai Labs Pvt Ltd, the operator of crypto exchange WazirX, the Directorate of Enforcement has taken action under the Foreign Exchange Management Act (FEMA), not PMLA. Zanmai Labs received one show-cause notice under FEMA, with Rs 289.28 crore referenced under Section 37A of FEMA, not PMLA.
This FEMA-related action is distinct and not connected to the Rs 907 crore asset attachments mentioned earlier, which fall under the Prevention of Money Laundering Act (PMLA).
Crypto Regulation Requires Global Coordination
Chaudhary reiterated that crypto assets remain unregulated in India and that international cooperation is essential for any effective regulatory framework.
"Crypto assets by definition are borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only with significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards," he said.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
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