Enforcement Directorate Raids Bengaluru Firm Over Alleged Cryptocurrency Money Laundering

Bengaluru, October 29 (Daily Kiran) : The Enforcement Directorate (ED) has taken action against alleged unauthorized cross-border financial transactions involving cryptocurrency and stablecoins. On October 27, the ED’s Bengaluru zonal office conducted searches at three locations in Bengaluru and one in Madhya Pradesh under Section 37 of the Foreign Exchange Management Act (FEMA) of 1999.

This investigation was initiated based on complaints against Bengaluru-based M/s RPFAS Technologies Private Limited. The company allegedly operates platforms named ‘Madrx’ and ‘Saber Money,’ utilizing cryptocurrency to facilitate unauthorized cross-border transactions and crypto trading.

According to the ED, preliminary confidential investigations and gathered intelligence indicated that the company was managing cross-border money transfers using crypto tokens, particularly stablecoins like USDT and USDC, bypassing authorized channels. The agency suspects violations of FEMA provisions through this method.

The ED claims the company promoted its services online, enabling instant international money transfers via cryptocurrency without the necessary authorization from the Reserve Bank of India (RBI). Their websites advertised services to convert traditional currency into cryptocurrency, buy and sell crypto, and exchange between different crypto tokens. This setup allows for converting traditional currency into crypto, sending it to another country, and then converting it back into local currency.

The agency expressed concerns that such arrangements could bypass authorized channels for cross-border money transfers. The ED is investigating whether transactions made through cryptocurrency violated FEMA provisions. The agency explained that “on-ramp” services facilitate converting traditional currencies like Indian Rupees, US Dollars, and Euros into virtual assets like Bitcoin or USDT, while “off-ramp” services allow users to cash out cryptocurrency into bank accounts.

A key focus of the investigation is to determine how these services are allegedly being used to circumvent authorized cross-border money transfer regulations. Currently, the ED has not provided detailed information regarding seizures or other findings from the searches, and the investigation is ongoing.