New Delhi: India’s top crypto app CoinSwitch is collaborating with the national financial-crime agency, whose agents this week searched its offices to find out about its business model and user-onboarding processes, its CEO told Reuters on Saturday. told.
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Coinswitch, worth $1.9 billion, says it is the largest crypto company in India, with over 18 million registered users. The firm is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures.
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Ashish Singhal, speaking publicly for the first time about Thursday’s discovery, said that his company was engaging with the Enforcement Directorate unit of India in tech hub Bengaluru on the functioning of its crypto platform.
“Most of their engagement with us has been about knowing what CoinSwitch does,” Singhal said, adding that the inquiries included details about how crypto exchanges operate, how users were onboarded and their customer-to-customer criteria.
A person with direct knowledge said that the case pertains to suspected violation of India’s foreign exchange laws. Sources said the agents inquired about foreign investments, income and outflows and seized financial documents to check compliance.
Singhal refused to divulge the agency’s allegations, citing legal sensitivity. The Enforcement Directorate did not immediately respond to a request for comment. The investigation of CoinSwitch comes amid strict regulatory scrutiny of the crypto sector in India.
A person with direct knowledge said that the case pertains to suspected violation of India’s foreign exchange laws. Sources said the agents inquired about foreign investments, income and outflows and seized financial documents to check compliance.
Singhal refused to divulge the agency’s allegations, citing legal sensitivity. The Enforcement Directorate did not immediately respond to a request for comment. The investigation of CoinSwitch comes amid strict regulatory scrutiny of the crypto sector in India.
The agency has said it was conducting money-laundering investigations against several shadow banks and their fintech companies for possible violations of central bank norms and predatory lending practices.
The Coinswitch search was “not about money laundering,” Singhal said. The agency “has engaged with us regarding the functioning of our crypto platform and we are cooperating fully with them,” he said. While there is no official data available on the size of India’s crypto market, CoinSwitch estimates that the number of investors could be up to 20 million, with total holdings of around $6 billion.