The country’s financial intelligence agency suspects several projects of money laundering schemes.
Indian intelligence agency has arrested several cryptocurrency wallets suspected of laundering large sums of money. So far, law enforcement has frozen about $115.5 million in cryptocurrency, TechCrunch reported citing India’s Enforcement Directorate (IED).
According to the agency, the seized cryptocurrency wallets were repeatedly seen in suspicious activity allegedly related to money laundering. The IED did not provide details, but it is known that they have arrested five people in connection with the suspicious activity.
In addition, India’s Enforcement Directorate representatives noted that the agency has previously conducted an investigation against the directors of the Indian cryptocurrency exchange WazirX. It is currently unknown whether the exchange’s activities are related to the seizure of $115.5 million.
WazirX has previously drawn the attention of Indian law enforcers for suspicious and outright illegal activities on multiple occasions. In January 2022, the exchange was accused of tax evasion totaling nearly $5.5 million. Later, in August 2022, the exchange was suspected of laundering about $350 million in cryptocurrencies through unknown wallets. These proceedings led to the Indian authorities seizing $8.1 million in the WazirX accounts and termination of agreements between this exchange and Binance.
India tries to regulate cryptocurrencies
Recently, the Indian authorities have been particularly active in combating money laundering with cryptocurrencies. For example, in 2021, the legislature defined how to tax crypto assets. Under the new rules, any income from crypto assets is subject to a 30% tax and a 1% deduction. This move has had a significant impact on local crypto exchanges, reducing trading volumes by 70%
Moreover, in March, the country’s Ministry of Finance published a notice on handling crypto-assets. According to the document, the circulation of cryptocurrencies will be regulated under anti-money laundering rules in South Asia. This means that crypto exchanges, NFT providers, and custody wallet operators will now be responsible for crimes committed using cryptocurrencies and blockchain technology on their platforms.