India’s Directorate of Enforcement (ED) on Thursday conducted searches at the offices and residences of CoinSwitch Kuber as well as its CEO and directors. The financial crime investigating agency is reportedly investigating a possible violation of the Foreign Exchange Maintenance Act (FEMA).
The searches were carried out after the ED officials found that the top executives of CoinSwtich Kuber, an India-focused a16z-backed crypto exchange, were not cooperating with the investigation, media reports said.
“We receive queries from various government agencies. Our approach has always been that of transparency. Crypto is an early-stage industry with a lot of potential and we continuously engage with all stakeholders,” an unnamed CoinSwitch spokesperson said in a statement on the latest development.
ED Probing 10 Indian Exchanges
Early this month, CryptoPotato reported that ED was investigating ten crypto exchanges for laundering over $125 million. The trading platforms reportedly facilitated the purchase of cryptocurrencies by dubious Indian companies worth INR 10 billion and the transfer of these assets to international wallets, mostly linked to illegal online betting companies in China.
In a similar case, ED conducted searches on the residence of one of the directors of WazirX early this month and froze a bank account with nearly $8 million in balance. The incident sparked a Twitter spat between Binance CEO Changpeng Zhao (CZ) and WazirX CEO Nischal Shetty. While CZ expressed concern over the way WazirX managed its affairs, Shetty claimed that the exchange is owned by Binance.
In yet another crackdown on a crypto trading platform, ED recently froze the bank account of Flipvolt Crypto Exchange which also runs Defi platform Vauld with nearly $45 million in balance. The investigating agency has accused Flipvolt of assisting some fintech companies in avoiding regular banking channels and transferring huge amounts of money earned by them through predatory lending.
CoinSwitch: India’s Second Crypto Unicorn
In October last year, CoinSwitch Kuber closed a $260 million Series C funding round from Andreessen Horowitz (a16z) and Coinbase Ventures, among others.
The company was valued at $1.9 billion. In a recent interview with Reuters, CoinSwitch Kuber’s CEO Ashish Singhal had pitched for regulatory clarity, certainty, and peace. Early this month, CoinSwitch announced the launch of a Web3 Discovery Fund, a venture capital initiative.
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Source: https://cryptopotato.com/indias-ed-searches-the-residences-of-coinswitch-kubers-ceo-and-directors/