Regulatory minefield: ED enters the crypt, waking up the ghosts for Crypto Inc
Awaiting price reaction for this filing.
India's Enforcement Directorate (ED) has initiated action against entities using cryptocurrencies for unauthorised cross-border money transfers, classifying such transactions as potential violations of the Foreign Exchange Management Act (FEMA). This strikes at the heart of crypto platforms that rely on offshore exchanges for liquidity, as both methods of paying foreign suppliers (USDT transfers and bank remittances) may breach FEMA rules. Legal experts warn this could create a serious regulatory minefield for crypto businesses sourcing liquidity from abroad and have called on RBI to clarify the status of Virtual Digital Assets under FEMA and the Liberalised Remittance Scheme, which caps individual remittances at USD 250,000 per year.