India’s prime crypto app CoinSwitch is cooperating with the nationwide financial-crime agency, whose brokers searched its workplaces this week to search out out about its enterprise mannequin and user-onboarding processes, its CEO instructed Reuters on Saturday.
CoinSwitch, valued at $1.9 billion, says it’s the largest crypto firm in India, with greater than 18 million registered customers. The agency is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.
Ashish Singhal, talking for the primary time publicly about Thursday’s search, stated his firm was participating with the Indian Enforcement Directorate’s unit within the tech hub Bengaluru on functioning of its crypto platform.
“Most of their engagement with us has been about knowing what CoinSwitch does,” Mr. Singhal stated, saying the inquiries included operations of crypto exchanges, how customers have been onboarded, and particulars about know-your-customer norms.
An individual with direct information stated the case pertains to suspected violations of India’s international change legal guidelines. Agents requested about international investments, revenue and outflows to examine on compliance, and seized financial paperwork, the supply stated.
Mr. Singhal declined to specify the agency’s allegations, citing authorized sensitivities.
The Enforcement Directorate didn’t instantly reply to a request for remark.
The investigation into CoinSwitch comes amid tightening regulatory scrutiny of the crypto sector in India.
In a separate case, the agency this month froze $8 million in property of WazirX, a prime digital foreign money change, in an investigation of a potential position in serving to prompt mortgage app corporations launder the proceeds of crime by changing them into cryptocurrencies on its platform.
WazirX disputes allegations
The agency stated it was conducting money-laundering investigations in opposition to a number of shadow banks and their fintech corporations for potential violations of central financial institution norms and predatory lending practices.
The CoinSwitch search was “not about money laundering,” Mr. Singhal stated. The agency “has been engaged with us with respect to functioning of our crypto platform and we are fully cooperating with them,” he stated.
While no official information is obtainable on the scale of India’s crypto market, CoinSwitch estimates the variety of traders at as much as 20 million, with whole holdings of about $6 billion.
