Indian Authorities Crack Down on Cryptocurrency Fraud Cases

The Enforcement Directorate (ED) of India is currently investigating several cases related to cryptocurrency frauds and money laundering, according to a report in The Economic Times on April 3. The investigation has revealed that a few crypto exchanges are allegedly involved in money laundering, with digital assets having the potential for criminal misuse.

The Minister of State for Finance, Pankaj Chaudhary, said in a written reply in the Lok Sabha that the ED has taken necessary action as per provisions of the Prevention of Money Laundering Act, 2002 (PMLA). As of January 31, 2023, proceeds of crime amounting to Rs 936.89 crore have been attached/seized/frozen, and five persons have been arrested in connection with these cases.

Pankaj Chaudhary

Furthermore, six Prosecution Complaints (PCs), including one supplementary PC, have been filed before the Special Court, PMLA in these cases, and assets amounting to Rs 289.28 crore have been seized under the Foreign Exchange Management Act, 1999 (FEMA).

Cryptocurrency assets are currently unregulated in India, and frauds relating to crypto are dealt with under existing laws against fraud and cybercrime. However, a show cause notice has been issued to cryptocurrency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its Directors under FEMA for transactions involving cryptocurrencies worth Rs 2,790.74 crore.

The ED’s investigation into cryptocurrency fraud and money laundering is ongoing, and more action is expected to be taken as the investigation progresses. The case highlights the need for stronger regulations around cryptocurrency in India to prevent fraudulent activity and protect investors.

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