Indian Probe Panel Demands More Documents from CoinDCX, Others

Despite the plummeting trading volumes, the Indian crypto space has come under strict surveillance from the authorities. The Indian Directorate of Enforcement (ED) is seeking additional documents from cryptocurrency firms in line with the ongoing probe on alleged foreign exchange violations.

According to a recent report by Economic Times, Sumit Gupta, the founder of crypto trading platform CoinDCX, and the executives at other crypto exchanges, including CoinSwitch Kuber, have been summoned by the probe agency.

An official from the directorate said the panel is “examining every detail” of offshore transactions and “transaction history, relationship with foreign exchanges, how much money is going out of India.”

A spokesperson for CoinDCX confirmed that the ED “sent notices to major exchanges in India seeking information and data on how platforms work” and that they have “shared all necessary information to the satisfaction of the department and no subsequent action is pending” at their end.

Since May this year, CoinDCX paused its crypto withdrawal facility without prior communication to its customers and, around the same time, enforced stricter know your customer (KYC) standards.

Multiple agencies have been investigating crypto firms, including the Income Tax department. In June 2021, the ED asked the largest cryptocurrency exchange in India, WazirX, to explain transactions worth 2,790.74 rupees allegedly violating FEMA rules.

Noteworthy is that the FEMA rules restricted payments to or from persons outside India with forex deals, claiming the objective of the Act is to facilitate external trade and payments for promoting the orderly development and maintenance of the forex market in India.