Dodgy cryptocurrency transactions in India have increased from around 1,000 last year to almost 12,000 in recent months, according to official data. The majority of those involved in these questionable transactions are between the ages of 20 and 40.
According to government statistics, 1,343 dubious transactions occurred between 2023 and 2024. In the first eight months of this year, the total increased by 773% to 11,720. People in their twenties and thirties account for 82% of these instances.
Tighter rules as crypto use grows
India now has 34 million people trading virtual digital assets, popularly referred to as cryptocurrencies. They are holding ₹24,800 crore worth of these assets as of November 30, 2025. Around 41% trade on sites based outside India, where local regulators have difficulty reaching them.
Digital currency is not trusted by the authorities. Officials say they let people avoid paying taxes, finance terrorists, and launder dirty money. In March 2023, the Prevention of Money Laundering Act was amended to properly supervise cryptocurrency exchanges.
The Financial Intelligence Unit is now required to register any company that helps people buy, sell, or store cryptocurrencies in India. Whether the company is headquartered in Miami or Mumbai is irrelevant. Registration is necessary if Indians are to use it to transfer digital currencies or trade cryptocurrencies for rupees.
Fifty-two companies have registered so far. They are required to report any suspicious deals that smell like crime money, transactions that seem unnecessarily complicated, or trades where the origin of the cash cannot be determined. Warning signs include old accounts that suddenly become active, transactions kept just under the reporting limits, fake trading to create losses on paper, and money that appears from nowhere.
These reports have increased significantly. Companies submitted 1,343 filings in fiscal 2024. That figure rose to 6,272 in fiscal 2025. Through November 30 of this year, it has already reached 11,720.
Officials reviewed 9,795 reports from May 2023 to May 2025. The cryptocurrency mentioned most often was Tether, which is designed to stay equal to one US dollar. It appeared in 7,467 cases, or 76% of the reports. Bitcoin showed up in just 6%.
Straightforward fraud made up 62% of the suspicious activity. Unusually complex or odd transactions accounted for 16%, while strange account behavior made up 10%.
By state, Rajasthan had the most reports at 18%, followed by Uttar Pradesh at 11%. Maharashtra and West Bengal each had 7%, and Madhya Pradesh had 6%.
A finance committee led by BJP member Bhartruhari Mahtab is now looking into cryptocurrency. The government has imposed ₹29 crore in fines on rule-breakers and blocked 63 websites under Section 69A of the Information Technology Act, 2000.
Cambodia link raises trafficking concerns
One case shows how serious this gets. Investigators found 34 customers whose internet connections traced back to Cambodia. They were using Cambodian phone numbers to access their Indian crypto accounts and getting money through Huione Pay, a payment company in Cambodia. Police think the money is tied to internet crimes and human trafficking.
“These individuals exhibited consistent behaviour of funding their accounts with USDT, immediately liquidating it, and withdrawing the corresponding amount in rupees to their bank accounts,” the Financial Intelligence Unit report stated.
Software that tracks crypto movements showed the digital coins came from Huione Pay. Several customers used the same phone or computer to log in and shared internet addresses.
Huione Pay said it reached 21 of these customers through WhatsApp. Eight were in Cambodia, six in Thailand, one in Vietnam, and one in India. They worked regular jobs, hotels, restaurants, engineering, supermarkets. Not the kind of work that explains moving that much money around.
The US has now cut off Huione Group from the American financial system. They can’t trade in dollars anymore.
Another problem is tax collection. By avoiding organizations that frequently report to tax authorities, cryptocurrency enables users to transfer money covertly across borders in a matter of seconds.
It gets harder to identify taxable revenue as more individuals utilize services with no central authority, private wallets they control, and foreign exchanges. Tax collectors are unable to identify property owners or collect unpaid taxes. Revenue from cryptocurrencies is often undocumented.
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Source: https://www.cryptopolitan.com/crypto-crime-india-12000-transactions/
