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India’s Special Investigation Team cautions government of growing use of crypto in money laundering, drug smuggling

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India's Special Investigation Team informs government of growing use of crypto in money laundering, drug smuggling

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India’s Special Investigation Team [SIT] has observed a growing network of criminal gangs using cryptocurrencies for illicit activities like laundering money and smuggling drugs, reported Firstpost. It is believed that the SIT has informed the government of the ongoing problems associated with the same, while also recommending no regulations for virtual currencies since such cases require more time for prosecution.

The SIT informed the government that cryptocurrencies have been used for illicit purposes, including an unaccounted amount of money used for betting. It also opined that despite levying regulations, the source for the “purchase of Bitcoin” [Cryptocurrencies] will remain unknown.

In its recommendation to the government, the SIT added,

“Transactions in Bitcoin would be carried out only through Internet including those with cross-border ramification. It would be difficult to control such transactions which are carried with utmost secrecy.”

In light of the series of crimes taking place using cryptocurrencies, the government has directed “concerned departments and law enforcement agencies such as the RBI, Enforcement Directorate and Income Tax authorities etc. to take action as per the relevant existing laws.”

However, there are still several reports about the rise in the use of cryptocurrencies and the degree of transactional anonymity it has provided to many terrorist organizations. Prominent terror organizations like ISIS, Al-Qaeda, and Hamas are becoming sophisticated in their use of crypto-tech, while asking for funds.

According to research conducted by MEMRI [Middle East Media Research Institute], these organizations have accepted Telegram to be their “app of choice,” while also misusing applications like ShapeShift that enables users to convert their cryptos. However, there have been several hacks that could not be successful due to blockchain tech and other functions developed by developers in the ecosystem.

Thus, India’s genuine concerns related to the use of cryptocurrencies can be addressed by the ongoing case before the Supreme Court, ‘IAMAI vs RBI,’ a case where the petititoner has challenged the central bank’s banking ban. The case regarding the draft bill formulated by the Inter-Ministerial Committee [IMC] will be heard in January 2020.


Namrata is a full-time journalist at AMBCrypto covering the US and Indian market. A graduate in Mass communication, while majoring in Journalism, she writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.
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