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ED flags foreign transactions, summons CoinDCX, others


The Enforcement Directorate has summoned cryptocurrency firms in India to look into whether the Foreign Exchange Management Act (FEMA) was violated. A CoinSwitch Kuber spokesperson confirmed the summons, stating that “Crypto is an early-stage industry with a lot of potential and we continuously engage with all stakeholders”.

A CoinDCX spokesperson told ET that it was not the only company to be summoned; a spokesperson for the firm refused to comment to Entrackr.

ET reported that Sumit Gupta, CoinDCX founder, had joined the probe a few weeks back. CoinDCX and Coinswitch Kuber paused withdrawals in June due to the crypto crash in the last few weeks.

In July 2021, the ED had sent a show-cause notice to WazirX for allegedly breaching foreign exchange limits in transactions on the platform. The firm recently said that it had no pending obligations from this process.

The ED has been scrutinizing crypto transactions for a couple years. While virtual digital assets, which comprise cryptos and NFTs, are not legal, authorities have been looking into illegal activities that they can be used to mask (in addition to vigorously taxing earnings from investments). The government has stopped short of outlawing crypto transactions but it has chipped away at ideal conditions for investment.

In December 2020, the ED arrested a cryptocurrency trader who was helping run an online betting app allegedly run by Chinese nationals. The ED also apprehended a man this year for siphoning off hundreds of crores in the so-called Morris Coin crypto scam.

The agency also cracked down last month on a Goa poker ring that was running with anonymous crypto accounts, and also made arrests in Delhi, Mumbai and Kolkata.

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