During a crackdown on black money trails, the Indian income tax department found a link between hawala dealers and the use of crypto-currencies in the city of Jaipur. The officials said that ₹ 20 crore (USD 2 million) in cash and jewelry, along with three cryptocurrency wallets, were seized from the raid on wedding planners and event organizers, said the ET.
They discovered another layer of money laundering: clients said they had deposited unexplained amounts of cash to be sold Bitcoins and tether through Hawala. The informal value transfer system, Hawala, facilitates the international transfer of funds outside conventional banking networks.
Crypto Wallets Seized Reveal Hawala Operators’ Hidden Network
Police said two seized crypto wallets belonged to domestic-based trading platforms, while the third connected with an internationally renowned digital currency exchange. It showed messages exchanged on WhatsApp, emails, and spreadsheets indicating the involvement of hawala operators from Gujarat and Rajasthan.
Jaipur: Income tax raids on wedding planners expose murky hawala-crypto nexus, officials seize Rs 20 crore in cash and jewelry https://t.co/8sxnm62S2g
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”These transactions were decentralised and out of the normal banking financial systems; hence, it is hard to track the flow of the funds,” an official said. He noted that while registered exchanges have been deemed to place stringent measures on KYC, others have found solace in the unregistered exchanges.
Raids were conducted targeting at least 20 wedding planners in Jaipur. The ring operates across the major cities of Mumbai, Hyderabad, and Delhi. The investigation also revealed that they work with resorts, hotels, caterers, and decorators who receive payments through either cash or banking institutions.
Some officials think this unexplained money went through middlemen, who cashed them into checks hoping to buy bitcoins at local markets. The probe is ongoing, and authorities are conducting raids to identify all who aided or profited from the fraud.
Analysts say the ‘exarticulation’ indicates a growing regulatory focus on India’s nuptial and events segment, which typically involves significant cash transactions. Officials are planning other similar raids in different cities as part of measures to address undeclared income and money laundering.
‘‘Such networks not only let loose funds get away from the taxman net but also taint the integrity of our financial systems by bringing in ill-gotten wealth into the formal economy,’’ an income tax officer involved in the investigation said.
This operation shows how, though cryptocurrency can be used to approach financial liberation, digital criminals can use it for nefarious ends. The regulatory approach in India to cryptocurrencies has been gradually strengthening, with regulators focusing on compliance with AML and effective KYC standards.
The results are expected to support arguments for increased regulation of cryptocurrency companies and raise awareness about the exploitation of uncontrolled financial tools.
The raids also indicate India’s intensifying war against money laundering and demand for more and better checks in heavy cash-generating sectors. The probe goes on as superiors expand their focus to encompass all aspects of the connection because the depth is explored.
