More than 3,000 crypto accounts being investigated for 'illegal activities': Report

3,300 cryptocurrency accounts that were suspected of being used for money laundering, drug trafficking, and other illegal activities, such as financing social unrest, were reportedly monitored by India's Financial Intelligence Unit (FIU) over the course of the previous eight months. Other law enforcement organisations and cryptocurrency exchanges, both in India and abroad, have received the information from the agency.

According to a report by The Economic Times, in addition to contacting global organisations, FIU has recommended closing these accounts.

India is a part of the Egmont Group, a global association of 166 nations' financial intelligence agencies.

"In the last few months (April to November) we have tracked about 3,300 accounts, associated with various illegal activities," a senior official was quoted as saying, adding that the list had been given to the Enforcement Directorate, the Income Tax Department, and the Central Bureau of Investigation.

In cases where the crypto accounts were local and operated on India-based crypto exchanges, the enforcement agencies have already requested that they be closed.

According to the official, the majority of these accounts' transactions were reportedly linked to drug trafficking, money laundering, child pornography, and wildlife smuggling, with many dating back to 2019.

Three digital asset management companies are being investigated, and a thorough investigation assisted in tracing some of these accounts.

FIU detected illegal cryptocurrency-facilitated drug transactions worth Rs 28,000 crore between 2019 and 2021.

The FIU also discovered transactions in which cryptocurrency deposits were made into accounts of people associated with social unrest and agitation, the official told ET.

According to the official, 70 per cent of these accounts have already been blocked, and the remaining 30 per cent are either being closed or fall outside the purview of Indian law enforcement.

"Cases where exchanges are in foreign jurisdiction, enforcement agencies are also working closely with international agencies and they have flagged the request to international agencies, including Interpol, Eurasian Group, Egmont (the Egmont Group of FIUs) and Europol," the official added.