Indian Authorities Raid Crypto Gateways Over Illegal Remittances

India’s Enforcement Directorate has executed a series of coordinated raids targeting major cryptocurrency fiat channels in Bengaluru. The financial watchdog accuses these digital asset platforms of operating as illicit conduits for unregulated cross-border monetary transactions, bypassing the country’s stringent foreign exchange frameworks.

India’s Enforcement Directorate launched a crackdown on the country’s crypto economy, saying it had quietly become unauthorized cross-border money transfer pipes. The regulator raided six premises linked to five Bengaluru-based fiat on-ramp and off-ramp platforms, allegedly conducting illegal cross-border transfers.

Operating via its specialized Zonal division in Bengaluru, the agency executed search operations at six distinct locations during 2026 under the mandate of Section 37 of the Foreign Exchange Management Act. Officials named Transak Technology India, Carretx Technologies, Mokshagna Technologies, Buyhatke Internet, and Abhibha Technologies as the primary entities under investigation.

Authorities successfully blocked roughly ₹6 crore maintained across multiple banking facilities. Investigators assert these specific accounts served as the primary vehicles for moving the disputed capital through the domestic financial ecosystem.

India’s ED explains how perpetrators moved money

The financial intelligence unit revealed that the targeted firms utilized an identical operational blueprint to move funds. Domestic users transferred fiat currency into corporate banking accounts to acquire digital assets, primarily focusing on the stablecoin USDT, before executing international transfers.

According to federal investigators, the entities deliberately evaded regulatory oversight by processing international settlement transactions without generating standard purpose codes. The platforms also failed to secure mandatory Foreign Inward Remittance Certificates, effectively establishing an unmonitored transactional pathway that circumvented existing statutory reporting guidelines.

Enforcement officials specifically accused Transak of converting domestic earnings into digital assets for transfer to its American subsidiary, Transak Inc. Concurrently, investigators allege that Carret operated over-the-counter trading desks aligned with foreign remittance applications to funnel capital back into the domestic market.

The case against Mokshagna involves individual users based in the United States who transferred capital that was subsequently converted into digital tokens. These assets were moved through domestic trading platforms and liquidated to local beneficiaries under the coordination of an overseas operative.

Just two days prior to the Bengaluru actions, the agency detained an individual linked to a separate ₹500-crore fraudulent digital asset scheme involving Korvio Coin, which impacted 248,000 retail participants. Simultaneously, formal charges were processed regarding a phishing campaign targeting Coinbase users, linked to an individual currently serving an American custodial sentence for a $20 million cyber theft.

India works towards proper crypto regulation

The South Asian nation operates without a formalized licensing architecture governing digital asset marketplaces or intermediary payment gateways. Instead, policymakers instituted a 30% flat levy on digital asset earnings alongside a 1% tax deducted at source for all transaction types.

During 2023, federal authorities updated oversight parameters to bring digital asset service providers directly under identical anti-money laundering statutes governing traditional banking houses. This policy framework informs the current enforcement strategy targeting fiat entry and exit points.

Regulators systematically focus operational pressure on fiat entry and exit nodes due to their visibility within the banking network. This methodology allows state actors to monitor the exact friction points where fiat currency converts into digital tokens, aligning with the strategic objectives of the recent enforcement operations.

Regulatory Outlook

The intensifying regulatory scrutiny highlights India’s institutional preference for strict oversight over outright prohibition. By targeting infrastructure nodes where fiat currency intersects with blockchain networks, the state maintains leverage over capital flight risks while a comprehensive legislative architecture undergoes multi-lateral deliberation.

FAQs

What triggered the Enforcement Directorate’s action against the Bengaluru crypto platforms?

The agency initiated operations following intelligence indicating that several fiat transaction gateways were operating as unapproved networks for international capital flight, processing transactions without generating the mandatory statutory compliance documentation required under domestic law.

Which specific cryptocurrency platforms were included in the regulatory raid?

The enforcement operation focused on five distinct digital asset service entities operating out of Bengaluru, specifically targeting Transak Technology India, Carretx Technologies, Mokshagna Technologies, Buyhatke Internet, and Abhibha Technologies.

How much capital was frozen by authorities during these operations?

Financial investigators successfully blocked approximately ₹6 crore residing within various commercial banking accounts that were allegedly utilized by the platforms to layer and settle the unauthorized cross-border fund transfers.

What tax rules currently govern cryptocurrency assets in India?

Domestic digital asset transactions are subject to a 30% flat tax on all generated gains with no allowances for capital loss offsets, complemented by a mandatory 1% tax deducted at source levied on every individual transaction.