India’s ED targets crypto fraud and terror financing

India’s Enforcement Directorate (ED) is sharpening its focus on cryptocurrency fraud, terror financing, cyber-enabled crime and narcotics trafficking.

Speaking at the agency’s 70th ED Day event, as reported by The Economic Times, Director Rahul Navin said traditional financial crimes such as bank and real estate fraud have declined, largely due to regulatory frameworks like the Insolvency and Bankruptcy Code and the Real Estate Regulation and Development Act.

Rising cases and strong conviction rate

The agency’s enforcement activity has increased significantly over the past year. During 2025-26, the ED filed 812 charge sheets and 155 supplementary charge sheets. This is nearly double the numbers recorded in the previous financial year.

Navin said the agency currently maintains a conviction rate of 94 per cent, with around 2,400 money laundering cases pending trial across Indian courts. He expressed confidence that most of these cases would result in convictions.

The ED has also returned assets worth ₹63,142 crore (abouy $6.6 million) to victims of financial fraud, including homebuyers, investors and banks. Established in 1956, the agency operates under key legal frameworks including the Prevention of Money Laundering Act, the Fugitive Economic Offenders Act, and the Foreign Exchange Management Act.

Crypto and cybercrime move centre stage

The shift towards crypto-related offences comes as digital assets increasingly feature in financial crime investigations. Authorities have flagged concerns over their use in money laundering, cross-border transfers and illicit financing.

India’s tax authorities have recently intensified oversight of digital asset transactions, issuing notices to investors who failed to report crypto activity in previous financial years.

Using advanced data systems such as the Insight Portal and Checkpoint/Restore In Userspace (CRIU) risk engine, officials are analysing exchange data, PAN-linked Know-Your-Customer (KYC) records and bank transactions to detect discrepancies. In some cases, total trading volumes have been treated as deemed income, significantly increasing potential tax liabilities.

These notices, issued under Section 148A of the Income-tax Act, act as early warnings, allowing investors to clarify discrepancies before formal proceedings begin. However, failure to respond could lead to penalties or further investigation.

Stricter compliance and global coordination ahead

The enforcement push is part of a broader regulatory framework introduced in the Union Budget 2026. This budget introduced penalties for inaccurate crypto reporting and strengthened compliance requirements.

India is also on it’s way to use the OECD’s Crypto-Asset Reporting Framework starting in April 2027. This will allow for cross-border sharing of crypto transaction data. It is expected to improve oversight of offshore holdings and lower tax evasion risks.

A broader crackdown on financial crime

Financial crime patterns have also changed. While traditional fraud linked to banking and real estate is declining, new-age risks tied to digital finance, cybercrime and globalised transactions are expanding rapidly.

As India strengthens both enforcement and regulatory frameworks, crypto-related compliance is set to become a central focus for authorities, investors and financial institutions alike. This is important as India’s cryptocurrency market recorded transactions worth ₹51,000 crore ($5.4 billion) in 2024–25, a 41 per cent increase on the previous year.

The rise reflects growing use of virtual digital assets amid evolving government policy and institutional activity. India has become one of Asia’s largest crypto markets, driven by younger investors and fintech adoption. Despite high taxation and the absence of formal regulation, digital assets such as Bitcoin, Ethereum and stablecoins are being used as alternative investment options.