ED summons CoinDCX, Coinswitch Kuber to probe FEMA violations: report

The Directorate of Enforcement (ED) sent notices to cryptocurrency exchanges including CoinDCX and Coinswitch Kuber earlier this week in cases of money laundering and foreign exchange offences, reported moneycontrol, citing sources.

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“Exchanges have been summoned regularly for the last two years. We are asked for customer data, and transaction details and usually called to the office to explain the data later,” said a senior executive of an exchange.

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Executives of these exchanges claim that other agencies, in addition to ED and FEMA, are also looking into various details.

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“CoinDCX as a company stays committed to complying with the law of the land and will cooperate with regulators at all times. As per our understanding, the ED has sent notices to major exchanges in India seeking information and data on how platforms work. As required, we have shared all necessary information to the satisfaction of the department and no subsequent action is pending at our end,” said a CoinDCX spokesperson.

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“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,” Coinswitch Kuber told Moneycontrol.

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In the same manner, the ED summoned WazirX a year ago to explain cryptocurrency transactions worth over Rs 2,800 crore that were allegedly in breach of FEMA norms.

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“The matter is pending before the Karnataka High Court where the company and its director filed a writ petition and the court has passed an interim order. We have complied with the order. The matter is sub judice,” said a WazirX spokesperson.

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This happens at a time when the cryptocurrency industry is battling dwindling volumes, taxes, and recently mandated TDS. The goal of levying TDS on crypto transfers is to record all transactions involving virtual digital assets.

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Cryptocurrencies are now taxed at the same rate as earnings from speculative activities such as gambling and lotteries, putting digital assets in the highest tax bracket.