CoinSwitch, valued at $1.9 billion, claims to be the largest cryptocurrency company in India, with over 18 million registered users. The company is backed by Andreessen Horowitz, Tiger Global, and Coinbase Ventures.
Ashish Singhal, speaking for the first time publicly about Thursday’s raid, said his company was engaging with the Indian Enforcement Directorate’s unit in the technology center in Bengaluru over the operation of its crypto platform. .
“Most of their engagement with us has been to find out what CoinSwitch does,” Singhal said, saying the surveys included cryptocurrency exchange operations, how users were onboarded, and details about the industry’s knowledge standards. customer.
A person with direct knowledge said the case concerns alleged breaches of India’s foreign currency laws. Officers asked about foreign investments, income and outflows to verify compliance, and seized financial documents, the source said.
Singhal declined to elaborate on 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 heightened regulatory oversight of the cryptocurrency industry in India.
In a separate case, the agency this month froze $8 million in assets of WazirX, a leading virtual currency exchange, as part of an investigation into a possible role in helping instant loan app companies to launder the proceeds of crime by converting them into cryptocurrency on its platform.
WazirX disputes these allegations.
The agency said it was conducting money laundering investigations against several ghost banks and their fintech companies for potential violations of central bank standards and predatory lending practices.
The CoinSwitch raid was “not for the purpose of 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.
Although no official data is available on the size of the Indian crypto market, CoinSwitch estimates the number of investors to be as high as 20 million, with total holdings of around $6 billion.