Crypto Crime Cases Under Probe; $18M Loss in India

The crypto industry in India is facing a serious threat as seven crypto-based money laundering cases have been reported in recent weeks. The Union Minister of State for Finance Pankaj Chaudhary informed the members of the lower house (Lok Sabha) of the Indian Parliament about the severity of these cybercrimes.

Regarding the investigation under the Prevention of Money Laundering Act (PMLA), the Directorate of Enforcement (ED) asserted that Rs 135 crore equaling $18 million were involved in the criminal proceeds.

Chaudhary remarked that reports received from law enforcement agencies (LEAs) in connection with the laundering show the investigated matter.

The Directorate of Enforcement (ED) is investigating 7 cases under PMLA, 2002 in which cryptocurrency has been used for Money Laundering. Cases investigated by ED under PMLA revealed that the accused have laundered Proceeds of Crime (PoC) through cryptocurrency.

Moreover, he added that investigations conducted by ED till now reveal some foreign nationals and their Indian associates have laundered the PoC using crypto accounts at certain exchange platforms.

In 2020, the agency bank had arrested one accused criminal in a similar crypto-money laundering case. Notably, the year 2021 saw many Indian crypto users visiting crypto scam websites more than 9.6 million times.

Chainalysis reports that crypto-based crimes were high in 2021 globally. DeFi platforms lost $162 million worth of cryptocurrency in 2020. Furthermore, cybercriminals used DeFi protocols to launder illicit funds.

To add, the crypto industry in India has been a center point of hot discussions. After frequent crypto bans and regulations, the Union Finance Minister introduced a 30% tax on cryptocurrency in the 2022 Budget.

Recently, the Reserve Bank of India (RBI) strongly expressed reservations against crypto use in the country, expressing the plan to make a regulatory framework for crypto payments. Moreover, RBI has serious concerns and issues over crypto use as they believe it could pose a threat to the financial stability of India.