Enforcement Directorate (ED) and the Income Tax Department (I-T Dept), among other agencies, are probing three digital asset management companies after the Financial Intelligence Unit (FIU) raised an alarm over their role in illegal drug transactions worth Rs 28,000 crore. The ED and the I-T Dept have received the detailed findings from the FIU, a report in the Economic Times (ET) said.
“Digital currency was used to buy and sell drugs and some of these companies facilitated it…So far the agency has been able to track transactions worth Rs 28,000 crore,” an official told ET.
Around 200 transactions conducted in Nigeria, the Cayman Islands and the British Virgin Islands, have been zeroed in upon by the FIU. The transactions were routed through exchanges located in India, the report added. The transactions were reportedly conducted between 2019 and 2021.
The development comes days after the Hyderabad Narcotics Enforcement Wing arrested several drug traffickers for operating on the Dark Web using crypto transactions.
The use of cryptocurrency has boomed since the outbreak of Covid-19, More people have invested in cryptocurrency. In India, currently, 7 per cent of the population owns digital currency and its adoption is among the fastest in the world in India.
The Finance Ministry and the Reserve Bank of India (RBI) have repeatedly raised concerns regarding the opacity of transactions in the crypto world.
In her latest visit to the US, finance minister Nirmala Sitharaman said that the world must adopt crypto regulations to mitigate the risk of money laundering, drug trafficking and terror funding. The OECD also released a framework to facilitate global regulation of such currencies.
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