CoinSwitch Kuber Raided by India’s AML Agency
- CoinSwitch Kuber, one of India’s largest crypto exchanges, had five of its premises searched by Indian authorities, who alleged the company had violated forex laws.
- India’s Enforcement Directorate believed the exchange had acquired shares worth more than $250 million in contravention of forex laws, in addition to being non-compliant with KYC requirements.
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One of India’s largest cryptocurrency exchanges, CoinSwitch Kuber, had its premises searched by the country’s anti-money laundering (AML) agency, Bloomberg reported on 25 August.
The publication cited a “person with knowledge of the matter, who said India’s Enforcement Directorate (ED) searched through five premises connected to CoinSwitch on Thursday. The individual noted that the agency not only searched through CoinSwitch’s office facilities, but also the residences of the CEO and directors of the company, alleging they had violated the country’s Foreign Exchange Management Act (FEMA). A spokesperson for CoinSwitch told Bloomberg:
“We receive queries from various government agencies. Our approach has always been that of transparency. Crypto is an early stage industry with a lot of potential and we continuously engage with all stakeholders.”
According to the publication’s source, the crypto exchange and its management are under suspicion of acquiring shares worth more than 20 billion rupees (around $250 million) in contravention of forex laws. In addition, the agency had also found that CoinSwitch was non-compliant with some of the country’s know-your-customer (KYC) requirements.
Founded in 2020, CoinSwitch Kuber has grown to become one of the largest cryptocurrency exchanges in India — alongside WazirX and CoinDCX — with more than 18 million registered users. It reached “unicorn” status in October last year, when prominent companies such as Coinbase Ventures and Andreessen Horowitz (a16z) led its $260 million Series C funding round.
Earlier this month, the Economic Times reported that India was conducting investigations into its crypto exchange ecosystem, with “at least ten” exchanges being the subject of money-laundering-related investigations by the ED. The AML agency has already frozen around $8.1 million in funds from the WazirX crypto exchange, alleging it had facilitated transactions from unnamed fintech firms to “purchase crypto assets and then launder them abroad”.
- Crypto exchange Bitget will make it mandatory for new users to undergo its level-1 KYC process starting 1 September, old users will have until 1 October to do the same.
- The level-1 KYC process requires users to submit a government identification and undergo facial authentication, and is in line with global regulatory guidelines.
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- The updated KYC checks will be introduced on 15 July, after which new users will be required to complete the process in order to gain full access to the exchange’s services.
- Existing users who fail to complete the KYC checks will face limitations on the platform, such as being unable to deposit new funds and only having access to certain services.
- The 1,400-page document lists the names of all users eligible for withdrawals, as well as the conditions that they need to meet in order to withdraw their assets.
- The bankruptcy court has permitted Celsius to return 94% of each eligible user’s assets, but only after their account has been updated with AML and KYC data.