CoinSwitch Kuber CEO Ashish Singhal Says EDs Raids Weren't About Money Laundering Probe

The ED conducted raids on the residences of directors and the CEO of Coinswitch Kuber and its official premises.

By Shomik Sen Bhattacharjee | Updated: 29 August 2022 14:36 IST

CoinSwitch Kuber CEO Ashish Singhal Says EDs Raids Weren't About Money Laundering Probe

Photo Credit: CoinSwitch Kuber

The Enforcement Directorate raided CoinSwitch Kuber's office premises last Thursday

Highlights

Singhal claims the ED raids were not about money laundering
Singhal didn't address the specifics behind the ED's actions
He also highlighted the unsettled nature of crypto regulation

CoinSwitch Kuber co-founder and CEO Ashish Singhal has clarified on Twitter that his firm is cooperating with India's Enforcement Directorate (ED) after the ED carried out raids on the cryptocurrency exchanges' official premises, the residences of directors, as well as Singhal's residence. Although initial reports had hinted that the raids were conducted in connection with violation of the Foreign Exchange Management Act (FEMA) norms, Singhal says that the ED is engaged with CoinSwitch Kuber to understand the functioning of the crypto exchange.

"Enforcement Directorate - Bengaluru has been engaged with us with respect to [the] functioning of our crypto platforms / exchanges," Singhal wrote. "We are fully cooperating with them."

Crypto is a new asset class. Being in early stages, cryptos are not yet clearly classified in most parts of the world.

Now, the law (in India and elsewhere) is still assessing if crypto is a “commodity”, “security”, “currency” or something new.
This is a work in progress.
— Ashish Singhal (@ashish343) August 27, 2022

Our engagement with the Enforcement Directorate - Bengaluru was NOT related to any money laundering enquiry under PMLA, as reported in some news articles.
— Ashish Singhal (@ashish343) August 27, 2022

Reports from Bloomberg and CoinDesk indicated last week that the searches were related to the country's foreign exchange statutes. Authorities in India have been conducting investigations into the country's crypto exchange ecosystem for months.

Singhal didn't address the specifics behind the Enforcement Directorate's actions, but highlighted the still-unsettled nature of crypto regulation in India.

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"Crypto is a new asset class. Being in early stages, cryptos are not yet clearly classified in most parts of the world. Now, the law (in India and elsewhere) is still assessing if crypto is a 'commodity', 'security', 'currency' or something new," Singhal wrote. "This is a work in progress."

India is not alone. Australia is carrying out a “token mapping” to understand this; in the US, there is an ongoing debate whether some crypto are considered commodities, others securities.
— Ashish Singhal (@ashish343) August 27, 2022

In a Saturday report, Reuters said that, per a source with knowledge of the process, financial records were seized during the office visits and officials asked questions regarding "foreign investments, income and outflows to check on compliance."

CoinSwitch "is committed to building a responsible crypto ecosystem that contributes to the Indian Economy, and creates wealth and employment for millions of Indians," Singhal wrote in the Twitter thread.

CoinSwitch raised a $260 million (roughly Rs. 2,076 crore) Series C funding round last October and is backed by venture capital majors including Andreessen Horowitz (a16z) and Tiger Global, among others.

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