27 crypto exchanges under Govt lens: 2,872 victims, Rs 600 crore, Pg1

Key Highlights:

• The Ministry of Home Affairs (MHA) flagged 27 cryptocurrency exchanges as conduits for cyber criminals laundering Rs 623.63 crore from 2,872 victims between January 2024 and September 2025.
• Indian Cyber Crime Coordination Centre (I4C) data reveals that victims invested through fake trading apps, with funds converted into digital assets and layered through multiple wallets.
• Exchanges like Coin DCX, WazirX, Giottus, Zebpay, Mudrex, and Coinswitch have been flagged due to their significant market share.
• The Enforcement Directorate (ED) and Financial Intelligence Unit (FIU) are investigating whether Indian intermediaries are functioning as "crypto mules," converting scam proceeds into tokens.

Detailed Insights:

• The scale of laundered money, Rs 623.63 crore, is considered just the "tip of the iceberg," indicating widespread misuse of even FIU-registered Indian crypto exchanges.
• Some exchanges highlight that they are not parties to transactions beyond facilitating lawful trade and have resolved KYC and AML issues since registering with the FIU in 2023.
• Breaches in crypto exchanges, such as the WazirX hacking incident in July 2024, have shaken user confidence, with companies now partnering with asset custodians and insurance covers to fortify user trust.
• The ownership structure of several top Indian crypto platforms involves foreign holding companies, often justified as a means for fintech startups to raise capital easily and navigate regulatory uncertainties.
• The Directorate General of GST Intelligence (DGGI) reported GST evasion of Rs 824.14 crore by 17 crypto exchanges, recovering Rs 122.29 crore by December 2024, highlighting trust issues between the industry and the government.

Key Concepts Involved:

• Virtual (digital) Asset Service Providers (VASPs): Entities that provide services related to virtual or digital assets, including cryptocurrency exchanges.
• KYC (Know Your Customer): A process used by businesses to verify the identity of their clients, assessing and monitoring potential risks of illegal intentions towards the business relationship.
• AML (Anti-Money Laundering): A set of procedures, laws, and regulations designed to prevent the disguising of illegally obtained money as legitimate income.