Indian cryptocurrency regulatory and criminal enforcement

Indian authorities have intensified scrutiny of the cryptocurrency sector through both criminal investigations and regulatory enforcement.

In early September, the Economic Offences Wing (EOW) assumed control of an investigation into a multi-level marketing and cryptocurrency fraud operating across several districts, including Madurai and Dindigul. The scheme, involving entities such as ‘FQL Investment Trading’ and ‘VG Investment Group Syndicate’, allegedly promised investors high daily returns and the ability to double funds within 45 days. Authorities have arrested 17 individuals and frozen 13 bank accounts linked to the operation, which reportedly used Tether (USDT) to move funds.

Concurrently, the Financial Intelligence Unit-India (FIU-IND) has targeted offshore virtual digital asset (VDA) service providers for non-compliance with anti-money laundering laws under the Prevention of Money Laundering Act. The FIU-IND issued notices to 15 offshore platforms, including Weex, Blofin, and WhiteBIT, and directed the removal of their applications and URLs from public access in India. These actions follow 2023 regulations requiring all VDA service providers to register with the FIU-IND, regardless of their physical presence in the country.