ED attaches Rs 4,189 crore in crypto frauds, arrests 29

The Enforcement Directorate has seized Rs 4,189.89 crore and arrested 29 people in multiple crypto fraud cases under PMLA. One accused is declared a fugitive economic offender, while authorities strengthen monitoring and investigation of virtual digital asset transactions

New Delhi: The Enforcement Directorate (ED) has investigated several crypto-related cases under the Prevention of Money Laundering (PMLA), attaching, seizing, and freezing proceeds of crime worth Rs 4,189.89 crore, arresting 29 people, and filing 22 prosecution complaints, while one accused has been declared a fugitive economic offender, the Parliament was informed on Monday.

The government has brought virtual digital assets (VDAs) under the PMLA 2002, making virtual asset service providers (VASPs) reporting entities and requiring them to submit specified and suspicious transaction reports to FIU-IND.

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These reports are analysed and shared with law enforcement agencies for further action, Union Minister of State for Finance, Pankaj Chaudhary, informed the Lok Sabha

“One accused has been declared a Fugitive Economic Offender. The Prohibition of Benami Property Transactions Act, 1988, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, apply to all assets, including VDAs,” the Minister added.

Moreover, cases of tax evasion linked to cryptocurrency and VDAs have been detected by the Central Board of Direct Taxes (CBDT) on multiple occasions, and the Income Tax Department takes action as per the Income Tax Act, 1961.

“During search and seizure operations, undisclosed income from VDA transactions of Rs 888.82 crore has been identified. Under the CBDT’s NUDGE (Non-Intrusive Usage of Data to Guide and Enable) campaign, 44,057 communications have been sent to taxpayers who invested or traded in VDAs but did not report these in Schedule VDA of their Income Tax Returns (ITRs),” Chaudhary noted.

Data analytics tools, project insight, and internal databases are used to match information on VDA transactions with disclosures in ITRs. TDS returns filed by Virtual Asset Service Providers (VASPs) and taxpayers’ ITRs are also analysed to identify discrepancies and take appropriate action.

The government is also undertaking capacity-building initiatives to strengthen the monitoring and investigation of VDA-related transactions. “Training programmes, workshops, ‘Chintan Shivirs’ and sessions on digital forensics, blockchain analysis, legal frameworks and digital evidence are regularly conducted. Officers also receive specialised short-term training in digital forensics through NFSU, Goa, to help identify and trace VDA-linked transactions from captured data,” said the Minister.