Silicon Valley-based Andreessen Horowitz and Sequoia Capital India-backed CoinSwitch Kuber is the third exchange which is facing ED lens for the alleged diversion of proceeds of crime raised by 365 instant loan apps by offering loans at exorbitant rates of interest.
After WazirX, ED freezes Rs 370 crore in bank accounts of another crypto exchange
ED lens on crypto exchanges
Earlier this month, it was reported that the ED is investigating at least ten cryptocurrency exchanges for allegedly laundering over Rs 1,000 crore identified as proceeds of crime of the accused firms in the instant loan app case. Many of these platforms have a China connection.
In another case of crackdown on crypto exchanges, the agency had seized assets worth Rs 370 crores including the crypto balances in the Flipvolt cryptocurrency exchange. Crypto lender Vauld serviced Indian residents through its domestic entity Flipvolt Technologies.
ED freezes WazirX director’s bank accounts worth Rs 64.70 crore following raids
Sources indicated that the agency is scanning for questionable peer-to-peer (P2P) transactions, inflated liquidity shown in key documents and lax know-your-customer (KYC) protocols of these exchanges. “The probe has found their (KYC) to be either bogus or dubious in more than 80 per cent of the cases,” a person cited above said.