According to a report from the Economic Times, India's Directorate of Enforcement (ED) sent notices to CoinDCX and CoinSwitch, in accordance with the local Foreign Exchange Management Act (FEMA). The regulatory agency is trying to find whether these firms were involved in foreign exchange violations or not.
India's FEMA rules provide for the maintenance of the foreign exchange market in the country and allow the country's authorities to seek more information. The objective of the Act is to facilitate external trade and payments and for promoting the orderly development and maintenance of the forex market in India
"Transaction history, relationship with foreign exchanges, how much money is going out of India ED is examining every detail on offshore transactions," an official said.
Indian crypto exchanges are already seeing plummeting trading volumes amid the prolonged crypto market. On top of that, investors are already subjected to a high tax of 30% on profits including a 1% (TDS) tax on all transactions. With the latest move, the country's crypto space goes through another strict vigilance from authorities.