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ED Summons Indian Crypto Exchanges On Alleged Foreign Exchange Violations

ED Summons Indian Crypto Exchanges On Alleged Foreign Exchange Violations
The probe comes amidst an ongoing crypto crash as sentiments stayed weak amid looming recession fears.

 

Indian cryptocurrency exchanges – CoinDCX, WazirX, and CoinSwitch Kuber – have been served notices by Enforcement Directorate earlier this week with allegations of violation of foreign exchange laws and charges of money laundering.

 

According to reports, the Indian economic intelligence agency along with multiple other agencies are also looking into the matter and have sought details and documents with any information under Foreign Exchange Management Act, or FEMA.

 

Following this, a spokesperson from CoinSwitch said that they received queries from various government agencies and their approach has always been transparent. While CoinDCX and WazirX have claimed to have been working in compliance with the laws and have shown cooperation to work with the investigating agencies.

 

This is not the first time that these exchanges have been served notices by federal investigating agencies. Last year in June, WazirX was asked by ED to explain cryptocurrency transactions worth INR 2,790.74 crore amid alleged violation of FEMA rules.

 

The probe comes amidst an ongoing crypto crash as sentiments stayed weak amid looming recession fears. Implementation of a 30 per cent tax deduction on crypto profits from April 1 by the federal government, followed by the 1 per cent TDS rule from July 1 further took a toll on the trading volumes.

 

According to a report by Gadgets 360, the average daily transaction volume on major Indian crypto exchanges eased to $5.6 million in the last few days, down from around $10 million until June. 

 

While these tax rules have been criticised by many as ‘unjust’, India still awaits a comprehensive legal framework to govern the crypto space.

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