ED Uncovers ₹2,500 Crore Crypto-Linked Cross-Border Remittance Network; Freezes ₹6 Crore After Searches At Six Bengaluru Firms

Mumbai, June 20: The Enforcement Directorate's (ED) Bengaluru Zonal Unit has uncovered alleged violations of the Foreign Exchange Management Act (FEMA) involving more than Rs 2,500 crore in unauthorised cross-border money transfers and frozen around Rs 6 crore in linked bank accounts after conducting searches at six premises associated with cryptocurrency payment and remittance service providers in Bengaluru, officials said. The action is among the largest regulatory crackdowns involving virtual digital assets (VDAs) in the country.

The action stems from an investigation into entities that allegedly used VDAs to facilitate inward and outward remittances outside the regulated banking framework. According to the ED, the transactions were routed through crypto exchanges and large-volume over-the-counter (OTC) deals before being liquidated and distributed to beneficiaries in India and abroad. Investigators are examining transactions linked to bank accounts and beneficiaries in multiple states, including Maharashtra, as part of efforts to trace the domestic movement of funds generated through the alleged remittance network.

Searches conducted at six entities

The searches, conducted on June 17 under Section 37 of FEMA, covered entities including Transak Technology India Pvt Ltd, Carretx Technologies Pvt Ltd, Mokshagna Technologies Pvt Ltd, Buyhatke Internet Pvt Ltd and Abhibha Technologies Pvt Ltd.

According to the ED, the searches revealed the use of large-volume OTC crypto transactions, shell entities incorporated in known tax havens and foreign-based cryptocurrency trading platforms for the unauthorised movement of funds across borders.

Alleged use of crypto for remittances

The agency alleged that the entities were offering "on-ramp" and "off-ramp" services that enabled users to convert traditional currencies into crypto assets and vice versa, effectively facilitating cross-border movement of funds through digital assets. Investigators claimed that several of the platforms openly advertised services for buying, selling and swapping cryptocurrencies for international remittances despite not being authorised by the Reserve Bank of India (RBI).

According to the ED, customers deposited money into company-controlled bank accounts, which was then used to purchase VDAs, primarily stablecoins such as USDT. These assets were subsequently traded through cryptocurrency exchanges and OTC transactions, with the proceeds transferred to beneficiaries in India and overseas.

The agency alleged that none of the entities under investigation was authorised by the RBI to undertake cross-border remittance activities. It further claimed that the firms bypassed regulatory requirements, including purpose codes, Foreign Inward Remittance Certificates (FIRCs) and other reporting obligations applicable to inward and outward remittances.

Specific entities under scanner

In one instance, the ED alleged that Mokshagna Technologies collected funds from customers in the United States, converted them into VDAs and transferred them to Indian cryptocurrency trading platforms. The assets were then liquidated through large-volume OTC transactions, with the proceeds credited to the company's bank accounts and subsequently distributed to beneficiaries in India. The agency alleged that the operation was controlled by a US-based individual who managed the network with the assistance of family members in India.

The ED further alleged that another entity, Transak Technology India, facilitated unauthorised outward remittances through digital assets. According to investigators, funds deposited in India were converted into virtual assets and transferred to wallets linked to its US-based affiliate, Transak Inc., enabling the movement of operational profits outside the country.

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According to the agency, Carretx Technologies operated a cryptocurrency trading application, "Carret", through which retail users could buy and sell digital assets. Customers deposited Indian rupees into the company's bank accounts and received corresponding cryptocurrency in their digital wallets. The ED alleged that, apart from facilitating such transactions, the company also engaged in OTC cryptocurrency transactions with foreign-based remittance applications to facilitate unauthorised cross-border fund transfers into India.

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