Enforcement Directorate Probing Several Cryptocurrency, Digital Currency Fraud Cases: MoS Finance

Enforcement Directorate is investigating several cases related to cryptocurrency/ virtual digital currency frauds wherein a few crypto exchanges have also been found involved in money laundering, Parliament was informed on Monday. In a written reply in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said the virtual digital assets have the potential for criminal misuse.

“Directorate of Enforcement is investigating several cases related to crypto currency/ virtual digital currency frauds wherein a few crypto exchanges have also been found involved in money laundering,” he said.

Necessary action as per provisions of Prevention of Money Laundering Act, 2002 (PMLA) has been taken by the Directorate of Enforcement (ED), he added.

“As on January 31, 2023, proceeds of crime amounting to Rs 936.89 crore have been attached/seized/freezed, five persons have been arrested and six Prosecution Complaints (PCs), including one supplementary PC have been filed before the Special Court, PMLA in these cases,” the minister said.

Further, under Foreign Exchange Management Act, 1999 (FEMA) assets amounting to Rs 289.28 crore have been seized.

The minister said one show cause notice to cryptocurrency exchange Zanmai Labs Pvt Ltd, known as WazirX, and its Directors under FEMA for transactions involving cryptocurrencies worth Rs 2,790.74 crore have also been issued.

Crypto assets are currently unregulated in India. Frauds relating to crypto are dealt with under extant laws against fraud and cyber crime.