Income tax authorities in Jaipur, India, have uncovered a complex money laundering scheme involving hawala networks and cryptocurrency transactions. The revelation came after raids targeting several wedding planners in the city. During these operations, officials seized $2 million, equivalent to Rs 20 crore, in cash and jewelry. The investigation traced three cryptocurrency wallets linked to the racket, two of which were associated with local exchanges and one with a major international crypto exchange.
The probe revealed that clients had been making unreported cash payments to acquire cryptocurrencies such as Bitcoin and Tether through hawala operators in Gujarat and Rajasthan. This illegal money transfer system allows for funds to be moved across borders without physical money transfers. Recent regulatory hurdles have made it more challenging for hawala-derived cryptocurrencies to be deposited on exchanges with stringent Know Your Customer (KYC) requirements. However, some individuals are suspected of circumventing these regulations by exploiting platforms with lax KYC policies or using intermediaries to convert cash into checks for crypto purchases via local exchanges.
Further evidence of these activities, including WhatsApp messages, emails, and spreadsheets, has been collected in an effort to identify all parties involved in unreported cash transactions. Officials suspect this network extends beyond Jaipur, with links to several major Indian cities, including Mumbai, Hyderabad, and Delhi. Additionally, the raids exposed a network of resorts, hotels, and service providers that have been accepting payments in cash or through banking channels. Authorities plan to extend their crackdown to other cities, targeting unaccounted financial transactions within the wedding and events sector.
