India’s Enforcement Directorate is conducting an investigation into ten exchanges for money laundering to the tune of over 1 Billion Rupees (equivalent to $125 Million) in digital assets. According to the Economic Times, the exchanges (which have not been named), were used by several companies to purchase up to 100 million rupees worth of cryptocurrency which was then sent to international wallets, mostly linked to China.


The sources note that the companies had a poor control over their user activity noting that the exchanges collected dubious KYC data as the accounts involved in the laundering belonged to people living in remote areas with no connection to the transactions.


The exchanges however claimed that they acted in compliance with anti-moneylaundering rules despite not providing any suspicious transaction reports that could have revealed some information on the presumed money laundering. The failure to comply with regulators’ measures made it especially difficult to track the accounts, which upon getting wind of the investigation, withdrew the funds and logged off.


This is not the only investigation being carried out by the Enforcement Directorate (ED) as they are still looking into the Binance and WazirX problem following spats on Twitter between the CEOs of the two exchanges over ownership and WazirX’s non-compliance with regulatory bodies. The ED already froze WazirX’s accounts holding more than $8 Million for allegedly aiding money laundering.


The ED is investigating several other cryptocurrency exchanges for money laundering and they often stress that the exchanges are the second point of failure in these crimes because the money goes in and out of traditional banks without being traced making it difficult to catch these crimes at banking level.


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