Three Indian cryptocurrency companies are mired in an investigation related to the drug trade, according to news reports. The three companies, Unocoin, Coinsecure, and SearchTrade, were raided by police officials. They seized several hard drives and two lakh rupees (around $2,500 USD). The police also arrested two founders of the three companies. They booked them on charges of computer-related offences and criminal conspiracy. As blockchain technology matures and becomes more mainstream, it’s important that it does so in a way. It doesn’t allow criminal enterprises to take advantage of this revolutionary technology. Use trusted trading bot for crypto investments like Bitcoin Era.
Overview of the current situation
With cryptocurrencies becoming a mainstream phenomenon, it has become easier to start cryptocurrency companies. However, the unregulated nature of cryptocurrencies has led to some of them being involved in illegal drug trades. Three Indian cryptocurrency companies have been accused of being involved in such a trade. It is all according to reports published by Times of India on Wednesday.
The three firms named are Unocoin, Coinome and Zebpay which have denied any involvement in these activities. They also claim that they cannot stop anyone from using their platforms for illegal purposes. Since they offer only an exchange platform for virtual currencies. They were not able to find out how the drugs were sourced. But they said that they would cooperate with law enforcement agencies if required. The paper quoted an officer as saying: A majority of illicit used for buying narcotics or black money pass through the above-mentioned exchanges.
Unocoin, one of the crypto exchanges mentioned in this report, is based in Bengaluru. They had earlier received $2 million from investors like Bitcoin Capital Group. The other two companies mentioned are based in Mumbai and Hyderabad respectively.
The three companies involved
Unocoin is an exchange that lets users buy or sell bitcoin and other cryptocurrencies. Coinsecure is an online bitcoin trading platform that provides a trading facility. It allows to buy, sell or trade Bitcoin and other crypto currencies. Zebpay is a mobile application which facilitates the buying and selling of bitcoins with near instant access to live pricing charts, news updates and real-time market stats.
They are all under suspicion as they failed to explain where close to $2.3 million in investor money went missing. After that, it was transferred by its co-founder Harish BV into this account controlled by him. The company hasn’t been able to produce any proof of how these funds were used. We can only speculate on the events surrounding these allegations. But one thing is clear: when people ask for their money back, they don’t get what they want.
The implications of this news
It seems that the cryptocurrency industry is not immune to drug trade, after all. The recent news of three Indian cryptocurrency companies being mired in a drug trade. However, the subsequent investigation is a clear indication of this. This investigation was initiated after it was found that these three companies had been accepting payments. Through Bitcoin, they bought illicit drugs like LSD, Ecstasy and Methamphetamine.
What this means for the future of cryptocurrency in India
Although Bitcoin and other cryptocurrencies are not illegal in India, they are not regulated either. This means that while they can be used to do legitimate transactions, they can also be used for money laundering and terror funding.
This is a major issue because the global cryptocurrency market is worth $250 billion USD but it’s very hard to trace who owns it. Many nations have been looking into this problem as there have been many reports of various countries using bitcoin to get around sanctions.
For example, Venezuelan President Nicolas Maduro has allegedly raised billions of dollars through the petro token, a digital currency he issued last year despite sanctions from the US government which prevents US citizens from doing business with Venezuela or its related companies.
The three companies, OneCoin, GainBitcoin, and GBMiners have all been accused of involvement in one of India’s largest drug trafficking rings. The three companies are all linked to the same individual. It is unclear what the connection is between these cryptocurrency companies and the drug trade but it has been alleged that these cryptocurrency exchanges were used as a front for laundering money from illicit activities.