Enforcement Directorate's Crackdown on Crypto-Related Financial Crimes

The Enforcement Directorate has intensified its investigations into cryptocurrency-related financial crimes, resulting in significant asset seizures and multiple arrests. With the classification of virtual digital assets under the Prevention of Money Laundering Act, the government is enhancing its monitoring capabilities. This includes training programs for officials and the use of advanced data analytics to identify tax evasion linked to cryptocurrencies. The recent actions highlight the government's commitment to tackling financial crimes in the digital asset space.

By Narendra Chaudhary Dec 8, 2025, 15:15 IST

ED's Actions Against Crypto Crimes

New Delhi, Dec 8: The Enforcement Directorate (ED) has been actively investigating numerous cases related to cryptocurrencies under the Prevention of Money Laundering Act (PMLA). As a result, they have attached, seized, and frozen assets amounting to Rs 4,189.89 crore, arrested 29 individuals, and filed 22 prosecution complaints. Additionally, one individual has been labeled a fugitive economic offender, as reported to Parliament on Monday.

The government has classified virtual digital assets (VDAs) under the PMLA 2002, designating virtual asset service providers (VASPs) as reporting entities. These providers are now mandated to submit specified and suspicious transaction reports to the Financial Intelligence Unit of India (FIU-IND). Union Minister of State for Finance, Pankaj Chaudhary, informed the Lok Sabha that these reports are analyzed and forwarded to law enforcement agencies for necessary actions.

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

Moreover, the Central Board of Direct Taxes (CBDT) has uncovered instances of tax evasion associated with cryptocurrencies and VDAs on several occasions, prompting the Income Tax Department to act in accordance with the Income Tax Act of 1961.

“During various search and seizure operations, undisclosed income from VDA transactions totaling Rs 888.82 crore has been identified. Under the CBDT’s NUDGE (Non-Intrusive Usage of Data to Guide and Enable) initiative, 44,057 communications have been dispatched to taxpayers who engaged in VDA investments or trading but failed to report these in Schedule VDA of their Income Tax Returns (ITRs),” Chaudhary highlighted.

To ensure compliance, data analytics tools, project insights, and internal databases are utilized to cross-reference VDA transaction information with disclosures in ITRs. The TDS returns submitted by VASPs and taxpayers’ ITRs are also scrutinized to identify inconsistencies and take appropriate measures.

The government is also enhancing its capacity to monitor and investigate VDA-related transactions. Chaudhary mentioned, “Training programs, workshops, ‘Chintan Shivirs’, and sessions on digital forensics, blockchain analysis, legal frameworks, and digital evidence are regularly conducted. Officers receive specialized short-term training in digital forensics through NFSU, Goa, to aid in identifying and tracing VDA-linked transactions from captured data.”