India has retained its top position in global crypto adoption for the second consecutive year in 2024. However, the nation continues to grapple with the misuse of the technology.
According to a recent report by a regional media outlet, enforcement agencies have detained individuals accused of converting ₹1 crore into USDT and funneling it to an international criminal network.
Recent investigations have uncovered that cyber gangs operating from foreign countries are leveraging local “mules” in Rajasthan to convert money from digital scams into cryptocurrency. This tactic allows criminals to bypass traditional financial channels, making it harder for authorities to trace the illicit funds.
Following the arrest a senior police official told the Indian media outlet “ Some of these mules have already been arrested by police in some districts and Special Operations Group (SOG),” adding “During interrogations, it emerged that these mules played a critical role in converting Indian currency into Tether (USDT) and transferring it to foreign cybercriminal networks.”
Experts argue such cases highlight the increasing sophistication of cybercrime and the urgent need for stricter regulations and monitoring of cryptocurrency transactions in India.
While carrying out the investigation the authorities seized four mobile phones, eight SIM cards, and a few other documents from the suspect. Not only in India but in other parts of the world criminal activities including terror funding, money laundering, and wired fraud have been particularly carried out by using stablecoins, especially USDT.
Illicit Crypto activities threaten regulatory clarity in India
Cryptocurrency usage and adoption have witnessed a remarkable surge in India, which, for the second time in 2024, has ranked as the nation with the highest crypto adoption globally. Despite this impressive growth and significant contribution to the global crypto market, the Indian government’s stance on cryptocurrencies remains unclear.
Under the leadership of Prime Minister Modi, the market anticipated progressive regulations for digital assets. However, as of now, there are no well-defined rules or regulations governing cryptocurrencies or digital currencies in the country.
It is worth noting that India is among the nations that have heavily imposed taxes on the gains and other sorts of activities concerning cryptocurrencies, yet the nation hasn’t banned cryptocurrencies officially and one can trade over his or her own risk.
Not only the government but also the authorities sitting in higher positions do not favor crypto and its usage, in a conference in 2024 the governor and deputy governor of the Reserve Bank of India has opposed digital currencies, terming it ‘private money.’
The criticism of crypto continues to grow in India, but the nation has continued to embrace its Central Bank Digital Currency, developed using blockchain technology/ digital ledger.
The Reserve Bank of India recently made the case that a country’s macroeconomic and financial stability may suffer as a result of the increased use of cryptocurrencies and stablecoins.
Overuse of cryptocurrency assets could jeopardize global financial stability, exacerbate fiscal risks, circumvent capital flow control procedures, and reduce the effectiveness of monetary policy, according to the Reserve Bank of India’s Financial Stability Report.
“Even though the size of crypto-asset markets remains small, their continued growth and increasing linkages with the traditional financial system could pose systemic risks; stablecoins also present potential run risks,” the report quotes.
