CoinSwitch Cooperates with Financial Crimes Agency – CEO Investigation

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Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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NEW DELHI, Aug 27 (Reuters) – CoinSwitch, India’s top crypto app, is cooperating with the national financial crime agency, whose officers searched its offices this week to learn more about its business model and its user onboarding process, its CEO told Reuters on Saturday. .

CoinSwitch, worth $1.9 billion, claims to be the largest crypto company in India, with over 18 million registered users. The company is backed by Andreessen Horowitz, Tiger Global, and Coinbase Ventures.

Ashish Singhal, speaking publicly on Thursday’s research for the first time, said his company was engaging with the Indian Directorate of Law Enforcement’s unit in Bengaluru Technology Center on the operation of its crypto platform.

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“Most of their engagement with us has been to find out what CoinSwitch does,” Singhal said, saying the investigations included crypto exchange operations, how users were onboarded, and details about knowledge standards. of your customer.

A person with direct knowledge said the case involved alleged breaches of India’s foreign exchange laws. Officers asked about foreign investments, income and outflows to verify compliance, and seized financial documents, the source said.

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

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

The investigation into CoinSwitch comes amid tightening regulatory scrutiny of the crypto industry in India.

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

WazirX disputes the allegations.

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

The CoinSwitch research was “not about money laundering,” Singhal said. The agency “has engaged with us regarding the operation of our crypto platform and we are fully cooperating with them,” he said.

Although no official data is available on the size of the Indian crypto market, CoinSwitch estimates the number of investors at 20 million, with total holdings of around $6 billion.

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

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