Acting on a recent directive from the Union Finance Ministry, the Enforcement Directorate (ED) has taken a group of 20 firms under its scanner for allegedly conducting illegal trade in crypto currencies (virtual currency) and promising high returns in a short span of time.
The ministry asked the ED to probe the firms' activities and submit a report to it, with reference to the Prevention of Money Laundering Act (PMLA), after its grievance cell received a number of complaints from the public against the firms’ activities, agency sources said.
Centre alerted ED, CBI and other investigative agencies
The Centre alerted the ED, along with the CBI and other central / state investigative agencies, about the rise in activities of the 20-odd firms. A crypto currency is a digital currency designed to work as a medium of exchange via a computer network that is not reliant on any central authority, such as a government or a bank, to uphold or maintain it.
A senior finance ministry official and the Union Cabinet Secretary communicated to the ED about the need to initiate appropriate legal proceedings and conduct an enquiry against entities running crypto trade illegally, an ED source said.
“The ED was asked to submit a detailed report on the probe related to the firms’ activities in view of the Prevention of Money Laundering Act,” the official said.
Directions issued after special board meeting of Finance Ministry
“The directions were issued after a recent special board meeting of the Finance ministry on the issue, in view of the receipt of multiple physical public complaints received against the firms in the grievance cell of the Finance Ministry”, the source said.
“These entities are promising very high returns, falsely claiming to be registered with financial authorities and running illegal crypto currency trade, promising high returns,” the source said.
The Centre’s communication was sent to ED, CBI, the Reserve Bank of India Governor, Chairman of the Central Board of Direct Taxes, all states’ Chief Ministers, chairmen of private banks and public sector units and the Lieutenant Governors of all Union Territories, agency sources said.
