Enforcement Directorate raids CoinSwitch Kuber’s offices

• ByStartupStory     |    August 26, 2022

The Enforcement Directorate raided the offices of cryptocurrency exchange CoinSwitch Kuber on Thursday for potential Foreign Exchange Management Act violations. The exchange’s spokeswoman downplayed the raid, adding, “We receive inquiries from many federal agencies.” Our approach has always been one of openness. Crypto is a young business with a lot of potentials, and we are constantly engaging with all players.”

When contacted via phone, the Enforcement Directorate’s Bangalore office, which crypto-focused publication Coindesk alleged was behind the raid, was unavailable. After receiving insufficient assistance from the corporation, the financial law enforcement agency chose to raid CoinSwitch outlets.

CoinSwitch co-founded PYOR Edge, a web3 analytics startup with the goal of “accelerating global institutional engagement in Web3.” This comes at a time when the Enforcement Directorate has been cracking down on cryptocurrency platforms due to allegations of bad actors conducting fraud on their platforms.

The agency froze Rs 367 crore in accounts owned by the exchange Vauld earlier this month. According to the ED, the Singapore-based exchange had “very lax KYC norms, no [enhanced due diligence] mechanism, no check on the depositor’s source of funds, no mechanism of raising [suspicious transaction reports], etc [and thus a Chinese loan app] assisted […] fintech companies in avoiding regular banking channels, as well as managed to easily take out all the fraud money in the form of crypto assets.”

This month, a director at Binance-owned exchange WazirX was also raided. While the Indian government has not prohibited cryptocurrencies, heightened law enforcement monitoring of the industry, as well as heavy government taxation, appear to be aimed at making the space unappealing to cautious investors. The Reserve Bank of India went to the extent of saying that private cryptocurrencies should be prohibited in India, but the government judged that more international collaboration would be required before such an action could be taken.

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