ED raids CoinSwitch Kuber's offices in money laundering probe
CoinSwitch Kuber becomes the third cryptocurrency entity to be raided by the enforcement directorate in recent weeks as a part of its money laundering probe.
The enforcement directorate (ED) has raided five offices of to investigate if the company helped launder the ill-gotten gains of 365 instant loan apps that forced exorbitant loan rates on unsuspecting customers.
CoinSwitch Kuber is the third cryptocurrency exchange to be raided under this anti-money laundering probe, according to an Economic Times report. The ED is looking into questionable peer-to-peer (P2P) transactions, inflated liquidity shown in key documents and lax know-your-customer (KYC) protocols at these exchanges.
“The probe has found their (KYC) to be either bogus or dubious in more than 80% of the cases,” said a person cited in the ET report. “The agency has found them to be in violation of section 11 (A) of the PMLA Act, which requires every reporting entity to verify the identity of its clients and the beneficial owner."
YourStory could not independently verify this report.
This raid comes after the ED had enacted similar actions at the office of WazirX-parent Zanmai Labs to freeze Rs. 64.67 crore in their bank accounts. It also seized assets worth Rs. 370 crore from the Vauld-run Flipvolt cryptocurrency exchange.
The ED's interest in the instant micro loan scam stems from 365 instant loan companies who charged their customers exorbitant interest rates, and collected through telecallers. These companies then allegedly laundered this money out of India using the fiat-to-crypto facilities provided by ten Indian crypto exchanges under investigation.
Edited by Akanksha Sarma
