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) – India’s top crypto app CoinSwitch is cooperating with the country’s financial crime agency, whose agents raided its offices this week to uncover its pattern business and user onboarding processes, its 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 firm is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.
Ashish Singhal, speaking for the first time publicly about the search on Thursday, said his company was working with the Enforcement Directorate of India’s unit in the technology hub of Bengaluru on the operation of its crypto platform .
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“Most of their engagement with us has been focused on finding out what CoinSwitch does,” Singhal said, saying inquiries included operations of crypto exchanges, how users were onboarded and details about know-your-own rules. customer
A person with direct knowledge said the case relates to alleged violations of India’s exchange laws. Agents asked about foreign investments, income and outflows to check 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 investigation into CoinSwitch comes amid tighter regulatory scrutiny of the crypto sector in India.
In a separate case, the agency this month froze $8 million in assets of WazirX, a major virtual currency exchange, in an investigation into a possible role in helping instant loan app companies launder proceeds of crime by converting them into cryptocurrencies on their platform. Read more
WazirX denies the allegations.
The agency has said it was conducting money-laundering investigations against several shadow banks and their Finnish technology companies for possible violations of central bank rules and predatory lending practices.
The CoinSwitch search “wasn’t 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.
While no official data is available on the size of India’s crypto market, CoinSwitch estimates the number of investors to be as high as 20 million, with a total of around $6 billion.
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Reporting by Aditya Kalra in New Delhi; Edited by William Mallard
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