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The Enforcement Directorate (ED), continuing its crackdown on cryptocurrency firms, has sent notices to crypto exchange companies CoinSwitch and CouinDCX as they came under the central agency’s radar. As per News18 sources, summons have been sent to officials of both the crypto firms. This comes a year after the the investigative department pulled up ZebPay for violating foreign exchange law.

The case against CoinSwitch and CoinDCX has been registered by the ED under the violation of the Foreign Exchange Management Act (FEMA), the abovementioned sources told News18. The investigative agency is trying to ascertain if these companies are violating FEMA laws and if they are involved in foreign exchange violations.

After initial investigations, summons for questioning were sent to both the crypto exchange firms by ED officials. The sources further added that the central agency asked several questions to both the companies. In addition, several  documents have been sought from these two crypto currency exchange firms by the ED’s investigation team.

This case has been registered by the Bengaluru branch of ED, the sources said.

It must be noted here that the present case has been registered in connection with the information received from CoinDCX founder Sumit Gupta, who had joined the ED’s investigation earlier this year. The sources said that ED had extracted importatnt information from Gupta at the time.

As per a statement quoted by IANS, DoinDCX said that “the ED has sent notices to major exchanges in India seeking information and data on how platforms work. As required, we have shared all necessary information to the satisfaction of the department and no subsequent action is pending at our end”.

“We receive queries from various government agencies. Our approach has always been one of transparency. Crypto is an early-stage industry with a lot of potential and we continuously engage with all stakeholders,” a CoinSwitch spokesperson said, confirming that they were sent notices too.

In June last year, crypto exchange firm WazirX was asked by the ED to explain alleged violation of the provisions of the Foreign Exchange Management Act, over cryptocurrency deals worth Rs 2,790.74 crore.

“In the period under investigation, users of WazirX via its pool account have received incoming cryptocurrency worth Rs 880 crore from Binance accounts and transferred out cryptocurrency worth Rs 1,400 crore to Binance accounts. None of these transactions are available on the blockchain for audit or investigation,” the ED had alleged at the time.

“WazirX allows wide range of transactions with crypto-currencies, including exchange into Indian rupees and vice-versa; exchange of crypto-currencies; and even transfer/receipt of crypto-currency held in its pool accounts to wallets of other exchanges which could be held by foreigners in foreign locations,” the ED had said.

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