CoinSwitch Partners with Investigation of Financial Crime Bureau -CEO

Representations of cryptocurrencies can be seen in this illustration, Aug. 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

NEW DELHI, Aug. 27 (Reuters) – India’s top crypto app CoinSwitch has partnered with the national financial crime bureau, whose agents searched its offices this week to learn more about its business model and user onboarding processes, it said. the CEO told Reuters on Saturday. .

CoinSwitch, valued at $1.9 billion, says it is the largest crypto company in India, with more than 18 million registered users. The company is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.

Ashish Singhal, who first spoke publicly about Thursday’s search, said his company was in talks with the Indian Enforcement Directorate’s unit in Bengaluru tech hub about the functioning of its crypto platform.

“Most of their engagement with us was about knowing what CoinSwitch does,” said Singhal, who said the questions covered crypto exchange operations, how users were onboard, and details about know-your-customer standards.

A person with direct knowledge said the case concerns suspected violations of Indian currency laws. Agents inquired about foreign investment, income and outflows to verify compliance and seized financial documents, the source said.

Singhal declined to specify the agency’s allegations, citing legal sensitivities.

The Enforcement Directorate did not immediately respond to a request for comment.

The CoinSwitch investigation comes amid increased scrutiny by India’s crypto sector regulators.

In a separate case, the agency this month froze $8 million in assets of WazirX, a leading virtual currency exchange, in an investigation into a possible role in helping app companies launder the proceeds of crime by converting them into cryptocurrencies on its platform. read more

WazirX is denying the allegations.

The agency has said it was investigating money laundering against several shadow banks and their fintech companies for possible violations of central bank standards and predatory lending practices.

The search for CoinSwitch was “not about money laundering,” Singhal said. The agency “has been in contact with us regarding the functioning of our crypto platform and we are fully cooperating with them,” he said.

While no official data is available on the size of the crypto market in India, CoinSwitch estimates the number of investors at up to 20 million, with total holdings of approximately $6 billion.

Reporting by Aditya Kalra in New Delhi; Editing by William Mallard

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