Five of the premises of CoinSwitch Kuber, a major Indian crypto exchange, were searched by anti-money laundering agents Thursday for alleged violations to forex laws.
Bloomberg reports that India’s Enforcement Directorate searched CoinSwitch Kuber offices and the homes of its CEO Ashish Singhal, according to an Aug. 25 Bloomberg report.
According to a source, the publication is being investigated by a crypto exchange for acquiring shares in excess of $250 million in violation of forex laws and non-compliance with certain know your customer (KYC).
The Directorate of Enforcement, a federal intelligence and enforcement agency, is under the Ministry of Finance. The agency’s primary goal is to enforce acts such as the Foreign Exchange Management Act (FEMA) and the Prevention of Money Laundering Act (POLLA).
CoinSwitch Kuber stated in a statement that it receives queries from different government agencies. Transparency has been our approach since the beginning.
“Crypto, an industry in its early stages with lots of potential, is constantly engaging with all stakeholders.”
CoinSwitch Kuber was launched in India in 2020. It is now one of the most popular crypto exchanges in India, along with WazirX or CoinDCX.
CoinSwitch Kuber was named a “unicorn” last year, after it raised $260 million through a Series C round of funding. The funding round was led by Coinbase Venture Capital arm Coinbase Ventures and Andreessen Horowitz. Sequoia Ventures, Paradigm and Ribbit are also backing the company.
These actions are part of a continuing crackdown on India’s cryptocurrency market.
Enforcement Directorate frozen approximately $8.1 million of funds from WazirX crypto exchange earlier this month. They claimed that WazirX facilitated transactions between unnamed fintech companies “to buy crypto assets and then to launder them abroad.”
Related: Indian crypto transactions tax regulatory implications
Two new laws were also introduced by the government this year, imposing severe taxes on unrealized gains and transactions related to crypto-related investments.
A survey of 2042 Indian crypto investors was conducted by KuCoin. 33% of respondents indicated that they are concerned about unclear government regulations that could discourage potential crypto investors.