Blab Crypto
Enforcement Directorate Sees 6 Cr Rupee Bank Accounts Frozen After Search of Five Bengaluru Crypto Platforms
On 19 June, the Enforcement Directorate (ED) issued a stark warning to Bengaluru’s burgeoning crypto ecosystem by announcing that it had seized approximately ₹6 crore in bank accounts linked to five local platforms. The action followed a raid on 17 June at six sites that housed Transak, Carret, Xpat (formerly Remit2Any), BuyHatke and Onmeta, all of which operate without the necessary approvals from the Reserve Bank of India (RBI) to facilitate cross‑border payments through virtual digital assets (VDAs).
The ED’s press release outlined how the agency began its probe after a complainant alleged that the platforms were conducting large‑scale foreign‑exchange violations. The investigation revealed that none of the five companies had obtained RBI authorization to offer VDA‑based remittance services. Instead, the firms allegedly bypassed the Foreign Exchange Management Act (FEMA) by routing money through stablecoins, predominantly USU.
According to the ED, the modus operandi was systematic and repeatable: users would register on the platforms and transfer funds; the money would then be deposited into the companies’ bank accounts; it would be converted into VDAs; the digital assets would be sold on Indian crypto exchanges; and the proceeds would be remitted to the intended recipients. The statement also highlighted that the platforms advertised instant cross‑border transfers using cryptocurrencies, a claim that could not be substantiated by RBI approval.
In the case of Onmeta, the ED provided a detailed account of the alleged flow of funds. The platform reportedly collected fiat from U.S. customers wishing to send remittances to India, converted those funds into VDAs, and transferred the digital assets to Indian crypto trading venues. The proceeds from the sale were credited to the parent company, Mokshagna Technologies Pvt. Ltd., which then distributed the money to customers in India. The agency added that the principal figure associated with Onmeta resides in the United States and manages the operation with the help of family members in India.
Cryptocurrencies remain largely unregulated in India, aside from a 30 % capital gains tax and a 1 % tax deducted at source (TDS) on every transaction. Last month, the parliamentary standing committee on finance classified the asset class as "high risk," citing concerns over money laundering, trafficking, radicalisation and suspicious crypto transactions.
The ED’s intervention is part of a broader regulatory push to tighten oversight of cross‑border payments and virtual assets. While the RBI has yet to grant authorization for VDA‑based remittances, the agency’s restraint orders on bank accounts aim to prevent further violations of FEMA. The investigation is ongoing, and the ED has not yet announced any arrests or further legal proceedings.
At present, several key questions remain unanswered: the full extent of the platforms’ operations, the identities of the individuals behind the entities, and whether the frozen accounts will be released once compliance is achieved. The ED has not indicated a timetable for lifting the restraints, and no additional regulatory measures have been announced beyond the current freeze.
The case underscores the challenges regulators face in policing virtual‑asset‑based cross‑border payments in a jurisdiction where the legal framework for cryptocurrencies is still evolving. It also highlights the need for clearer guidelines from the RBI and the government to prevent circumvention of foreign‑exchange laws.
As the investigation continues, market participants and users of these platforms will be watching closely for any developments that could reshape the regulatory landscape for crypto‑enabled remittances in India.
The ED’s press release outlined how the agency began its probe after a complainant alleged that the platforms were conducting large‑scale foreign‑exchange violations. The investigation revealed that none of the five companies had obtained RBI authorization to offer VDA‑based remittance services. Instead, the firms allegedly bypassed the Foreign Exchange Management Act (FEMA) by routing money through stablecoins, predominantly USU.
According to the ED, the modus operandi was systematic and repeatable: users would register on the platforms and transfer funds; the money would then be deposited into the companies’ bank accounts; it would be converted into VDAs; the digital assets would be sold on Indian crypto exchanges; and the proceeds would be remitted to the intended recipients. The statement also highlighted that the platforms advertised instant cross‑border transfers using cryptocurrencies, a claim that could not be substantiated by RBI approval.
In the case of Onmeta, the ED provided a detailed account of the alleged flow of funds. The platform reportedly collected fiat from U.S. customers wishing to send remittances to India, converted those funds into VDAs, and transferred the digital assets to Indian crypto trading venues. The proceeds from the sale were credited to the parent company, Mokshagna Technologies Pvt. Ltd., which then distributed the money to customers in India. The agency added that the principal figure associated with Onmeta resides in the United States and manages the operation with the help of family members in India.
Cryptocurrencies remain largely unregulated in India, aside from a 30 % capital gains tax and a 1 % tax deducted at source (TDS) on every transaction. Last month, the parliamentary standing committee on finance classified the asset class as "high risk," citing concerns over money laundering, trafficking, radicalisation and suspicious crypto transactions.
The ED’s intervention is part of a broader regulatory push to tighten oversight of cross‑border payments and virtual assets. While the RBI has yet to grant authorization for VDA‑based remittances, the agency’s restraint orders on bank accounts aim to prevent further violations of FEMA. The investigation is ongoing, and the ED has not yet announced any arrests or further legal proceedings.
At present, several key questions remain unanswered: the full extent of the platforms’ operations, the identities of the individuals behind the entities, and whether the frozen accounts will be released once compliance is achieved. The ED has not indicated a timetable for lifting the restraints, and no additional regulatory measures have been announced beyond the current freeze.
The case underscores the challenges regulators face in policing virtual‑asset‑based cross‑border payments in a jurisdiction where the legal framework for cryptocurrencies is still evolving. It also highlights the need for clearer guidelines from the RBI and the government to prevent circumvention of foreign‑exchange laws.
As the investigation continues, market participants and users of these platforms will be watching closely for any developments that could reshape the regulatory landscape for crypto‑enabled remittances in India.
