India’s ED targets on-ramp/off-ramp firms in cross-border crypto probe
Through its Bengaluru Zonal office, the Enforcement Directorate ransacked six premises this week under section 37 of the Foreign Exchange Management Act (FEMA), 1999. ED named Transak Technology India, Carretx Technologies (Carret), Mokshagna Technologies (formerly Xpat, now Remit2Any), Buyhatke Internet (which runs Onramp.money), and Abhibha Technologies (Onmeta), as the crypto payments involved.
The investigators reportedly froze approximately ₹6 crore sitting in the bank accounts they suspect were used to move the funds.
India’s ED explains how perpetrators moved money
India’s financial watchdog explained that the crypto payment firms used the same pattern across all platforms. A customer would deposit rupees into a company-controlled bank account, then use the money to buy virtual digital assets. The companies primarily bought USDT stablecoins, which were then sent through crypto platforms, sold over the counter, and then cash was paid out to the recipient on the other side of the border.
According to ED, the five platforms bypassed laws by conducting cross-border payments without purpose codes, without Foreign Inward Remittance Certificates, and without the required paperwork. The payments led to a sophisticated crypto-based detour around the entire FEMA reporting frameworks.
The Enforcement Directorate accused Transak of converting locally earned profits into crypto and transferring them to a U.S. affiliate, Transak Inc., bypassing normal banking channels. ED also claimed that Carret is alleged to have run OTC trades with overseas remittance apps to pull money into India.
Mokshagna’s case reportedly involves customers in the United States depositing funds that were converted to crypto, moved onto Indian exchanges, and paid out to recipients in India, allegedly coordinated by a person based in the U.S.
Just two days before the Bengaluru raids, the ED arrested a suspect in a separate ₹ 500-crore Ponzi scheme built around a token called Korvio Coin, which allegedly targeted more than 248,000 investors through multi-level marketing. The same day, it filed a prosecution complaint over a Coinbase phishing operation tied to Indian national Chirag Tomar, already serving a U.S. prison sentence for stealing more than $20 million through fake Coinbase login pages.
India works towards proper crypto regulation
India currently lacks a dedicated licensing regime for crypto exchanges or the apps that connect them to the banking system. Instead, the regulator imposed a 30% flat tax on gains with no loss offsets, a 1% TDS on every trade. In 2023, they implemented a rule that pulled virtual asset service providers under the same anti-money-laundering law as banks.
India’s enforcement has historically targeted fiat on-ramps and off-ramps simply because they’re the easiest place to choke the flow of money. This way, the authorities can monitor the single point where rupees turn into crypto and back again, which fits neatly with this week’s raids.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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