CoinSwitch is not being investigated for money laundering, CEO claims

CoinSwitch Kuber CEO Ashish Singhal on Saturday provided more information about searches of his office and residence by India’s Financial Crimes Investigation Agency, Enforcement Directorate (ED), two days ago.

He denied recent allegations that his company had been investigated for some illegal activities.

CoinSwitch CEO Explains

In a Twitter thread, Senegal explained that the searches by the emergency department were not linked to any investigation related to the Prevention of Money Laundering Act (PMLA).

“Enforcement Directorate – Bengaluru has engaged with us regarding the operation of our crypto exchanges/platforms. We are fully cooperating with them… Our engagement with the Directorate of Enforcement – Bengaluru was not related to any inquiry about money laundering under the PMLA as reported in some news articles,” He said on Twitter.

According to Senegal, the problem stems from the lack of clarity about the state of cryptocurrencies – whether it is a commodity, a security, a currency, or something else. It is a new asset class but is not clearly classified. The classification, nature and business model determine which foreign exchange laws are applicable.

“India is not alone. Australia is conducting “token mapping” to understand this; in the US, there is a debate about whether some cryptocurrencies are considered a commodity, and others are securities,” Singhal added in his Twitter thread.

Search for ED and its fees

on Friday, encrypted potato It reported that CoinSwitch, India’s second rhino horn in the crypto space, has been investigated by the ED on suspicion of violating the Foreign Exchange Maintenance Act (FEMA). In connection with the investigation, the CEO conducted searches of five CoinSwitch-related buildings, including the residences of the CEO and managers, on Thursday.

A Reuters news report on Saturday claimed that emergency department officials confiscated some financial documents during the search. Inquire about CoinSwitch’s foreign investments, income and outflows to verify compliance with applicable laws and regulations. The coverage also quoted Senegal as saying he refused to “identify Ed’s allegations, citing legal sensitivities.”

sharpening review

The ED is said to be investigating at least ten crypto exchanges for suspected violations of FEMA and PMLA. The offices of WazirX and Vaud have searched and frozen some of their bank accounts in recent weeks. CoinSwitch is another big brand in the crypto space that ED is researching.

In general, scrutiny of cryptocurrency exchanges is tightened by law enforcement agencies. In April, several Indian companies were forced to stop deposits in INR as the express payment facility through UPI was rejected by the Reserve Bank of India-controlled NPCI which operates the interbank mobile instant payment and settlement facility.

This was followed by the government’s decision to impose a massive capital gains tax of 30% and 1% TDS on all cryptocurrency transactions from April and July respectively. The move prompted cryptocurrency exchanges to boost their compliance standards.

It emerged after CoinSwitch had not investigated money laundering, claims CEO first on CryptoPotato.

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