The Crypto Exchanges Under Scanner? According to Techsametv.com, CoinSwitch is now being investigated for violating the Foreign Exchange Management Act (FEMA).
The agency is investigating to determine if the companies violate FEMA laws or if they are involved with foreign exchange violations.
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As crypto exchanges came under the radar of the central agency, the Enforcement Directorate (ED) continues its crackdown against them.
It sent notices to CoinSwitch and CouinDCX. According to News18 sources summonses have been sent both to the officials of the crypto firms.
This follows ZebPay’s investigation by the investigative division for violating foreign currency law.
Officials from the ED sent summonses for questioning to both crypto exchange companies after initial investigations. Sources further stated that both companies were
asked numerous questions by the central agency. The investigation team at the ED also sought several documents from these cryptocurrency exchange companies.
Sources said that the Bengaluru branch has registered the case.
The present case was registered in connection to the information obtained from Sumit Gupta (founder of CoinDCX), who had joined the
ED investigation earlier this year. Sources claimed that ED had obtained important information about Gupta during the investigation.
According to an IANS statement, DoinDCX stated that the ED had sent notices asking major Indian exchanges for information.
how platforms work. We have provided all information required to satisfy the department. No further action is currently pending.
We are often contacted by various government agencies. Transparency has been our main focus. “Crypto is an early-stage market with lots of potentials, and we
continually engage with all stakeholders,” a CoinSwitch spokesperson stated. He confirmed that they had been sent notices as well.
The ED asked WazirX, a crypto exchange company, to explain a violation of the Foreign Exchange Management Act. This was in relation to cryptocurrency transactions worth Rs 2,790.74 Crore.
WazirX users have, during the investigation period, received cryptocurrency inflows of Rs 880 crore through Binance accounts. They also transferred cryptocurrency out
to Binance accounts worth Rs 1,400 crore. The ED claimed that none of these transactions were available on the Blockchain for audit or investigation.
The ED stated that WazirX “allows a wide range of transactions using crypto-currencies including exchange into Indian rupees or vice-versa, exchange of cryptocurrencies
as well as transfer/receipt crypto-currency from its pool accounts to wallets on other exchanges that could be held by foreigners in different locations.