Multiple Crypto-Related Money Laundering Cases Under Investigation



Minister of State for Finance Pankaj Chaudhary informed the lower house of the Indian Parliament today that seven crypto cases are under investigation. The Directorate of Enforcement (ED) claims that proceeds of Rs 135 crore (around $18 million) were involved in the schemes.

Chaudhary told the Lok Sabha in a written reply, “Reports have been received from law enforcement agencies (LEAs) in connection with usage of cryptocurrency by cybercriminals. The Directorate of Enforcement (ED) is investigating 7 cases under PMLA, 2002 in which cryptocurrency has been used for Money Laundering. Cases investigated by ED under PMLA revealed that the accused have laundered Proceeds of Crime (PoC) through cryptocurrency.”

Needless to say that India’s crypto crimes, in a way, mirror a global trend that comes with increased use of the asset class. Chainalysis noted in its 2022 report that virtual asset crime hit a new record in 2021, with illicit addresses receiving $14 billion over the year, up from $7.8 billion in 2020.

Through the last year alone, Indian users reportedly visited crypto scam websites over 9.6 million times.

With that being said, the minister explained, “Investigations conducted by Enforcement Directorate so far, revealed that some foreign nationals and their Indian associates have laundered the PoC through cryptocurrency accounts at certain exchange platforms.”

Further adding that an accused was arrested by the agency back in 2020 in a similar case. Reiterating how these crimes facilitate the transfer of foreign money through cryptocurrency.

It’s worth noting that the Financial Action Task Force (FATF) had revised its 2019 guidelines around international anti-money laundering and financing of terrorism through its AML/CFT standards last year. Under the Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers (VASPs), the inter-governmental body had noted that countries should ensure that “there is a range of effective, proportionate and dissuasive sanctions, whether criminal, civil or administrative, available to deal with VASPs that fail to comply with AML/CFT requirements,” further ensuring that licensed or registered entities are subject to effective systems for ensuring compliance.

The watchdog also advocated applying these sanctions to the directors and senior management of the VASPs in question. Meanwhile, in India, there are no guidelines specific to the sector in place yet.


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