Investigation into Binance and Digital Wallets
India’s financial regulatory body is currently investigating the cryptocurrency exchange Binance alongside private digital wallets due to concerns about a notable rise in cross-border transactions originating from Pakistan. These transactions are suspected to be linked to financing networks involved in illicit activities, including terrorism.
Increased Scrutiny by Financial Intelligence Unit
With security risks becoming a pressing issue, the Financial Intelligence Unit of India (FIU-IND) has ramped up its scrutiny of Binance, identified as a primary channel for these alleged illegal transactions. Officials have observed a surge in trade activity particularly near crucial border areas, prompting further examination.
To tackle this, FIU-IND is collaborating with law enforcement agencies to gather intelligence and track the movement of funds, aiming to pinpoint dubious accounts and unveil potential networks.
Cooperation and Compliance
Since registering with the FIU in August 2024, Binance has reportedly been cooperative with the investigation. In contrast, Wazirx, another player in the Indian cryptocurrency market, has distanced itself from these allegations, stressing that it has ceased operations since July 2024.
Recent Developments and Regulatory Measures
In a related development, authorities recently uncovered a crypto scam in Ahmedabad, which involved fraudsters operating from Nepal. Binance’s tools reportedly aided in resolving this case, reflecting its growing significance in the region’s crypto landscape.
As part of ongoing efforts to enhance regulatory oversight, India is anticipated to enact stricter compliance measures under the Prevention of Money Laundering Act, aimed at preventing the exploitation of digital currencies for nefarious purposes. This initiative aligns with a recent report from the Financial Action Task Force (FATF) that has raised alarms about global cryptocurrency misuse.
