India’s economic intelligence agency has raided the premises of Andreessen Horowitz-backed CoinSwitch Kuber exchange, accusing the platform of violating foreign exchange regulations.
The Enforcement Directorate (ED), an agency under the Indian Ministry of Finance that enforces economic laws and fights economic crime, raided five premises owned by CoinSwitch, Bloomberg reported, citing unnamed sources.
Additionally, the ED searched the residences of directors at the exchange, including the home of chief executive officer Ashish Singhal.
According to the source, who asked not to be named as the matter isn’t public yet, ED is going after CoinSwitch for acquiring shares worth INR 20 billion ($250 million), an action which violated India’s foreign exchange laws. Furthermore, the exchange allegedly failed to comply with certain know-your-customer programs.
“We are looking into multiple possible contraventions under FEMA (Foreign Exchange Management Act) and other entities that are connected to it. Since we did not receive the desired cooperation, we have conducted searches on (residences) of directors, the CEO, and the official premises of the exchange,” an official at the agency told a local media outlet.
CoinSwitch brushed off any claims that it was in regulatory trouble, describing the raid as a routine visit from the regulators.
“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,” a spokesperson for the exchange told Bloomberg.
CoinSwitch is one of India’s largest exchanges. Its stellar growth over the past couple of years has seen it attract some of the biggest venture capital in the industry, raising $300 million since its launch and becoming a unicorn last year, the second exchange to hit the $1 billion valuation after CoinDCX. Some of its prominent backers include Andreessen Horowitz, Coinbase Ventures and Sequoia.
The ED has been going after exchanges for some time now. As CoinGeek reported recently, the agency launched investigations against at least 10 exchanges including Binance-owned WazirX for laundering $130 million for China-linked companies.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
