ED Attaches ₹4,190 Crore in Crypto Fraud Cases; One Accused Declared Fugitive Economic Offender
CBDT Detects ₹888 Crore Undisclosed Crypto Income, Issues 44,000 Notices to Taxpayers
Government Tightens Oversight by Bringing Virtual Digital Assets Under PMLA
By Our Legal Reporter
New Delhi: December 09, 2025:
In a major crackdown on cryptocurrency-linked fraud, the Enforcement Directorate (ED) has attached assets worth ₹4,189.89 crore in multiple crypto-related cases under the Prevention of Money Laundering Act (PMLA). The agency also declared one accused a Fugitive Economic Offender (FEO), marking one of the largest enforcement actions against crypto scams in India.
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Simultaneously, the Central Board of Direct Taxes (CBDT) uncovered ₹888.82 crore of undisclosed income from Virtual Digital Asset (VDA) transactions during search and seizure operations. Notices were sent to 44,057 taxpayers who traded in crypto but failed to disclose these transactions in their Income Tax Returns (ITRs).
Background of the Case
- Crypto Crackdown: The ED has been investigating several crypto-related frauds involving money laundering, Ponzi schemes, and illegal transfers abroad.
- Assets Attached: Proceeds of crime worth ₹4,190 crore were seized, frozen, or attached under PMLA provisions.
- Fugitive Declared: One accused was declared a Fugitive Economic Offender, enabling confiscation of assets under the Fugitive Economic Offenders Act, 2018.
- CBDT Action: Parallel investigations by CBDT revealed widespread tax evasion through undisclosed crypto transactions.
Court and Government Observations
- Minister’s Statement: Minister of State for Finance Pankaj Chaudhary informed Parliament that VDAs have now been brought under PMLA to strengthen oversight.
- Tax Compliance: The government emphasized that taxpayers must disclose crypto holdings in Schedule VDA of ITR forms.
- Legal Framework: By extending PMLA to VDAs, authorities can now investigate crypto exchanges, wallets, and intermediaries for suspicious transactions.
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Wider Legal Context
- PMLA Coverage: Crypto assets are now treated like other financial instruments under anti-money laundering laws.
- FEO Act: Declaring an accused as a Fugitive Economic Offender allows confiscation of domestic and overseas assets.
- Tax Enforcement: CBDT’s detection of ₹888 crore undisclosed income highlights the scale of crypto-linked tax evasion.
- Global Trend: Countries worldwide are tightening crypto regulations to prevent misuse for money laundering and terror financing.
Implications of the Ruling
- For Investors: Reinforces the need for transparency and compliance in crypto transactions.
- For Exchanges: Crypto platforms must strengthen KYC norms and reporting standards.
- For Government: Demonstrates India’s commitment to regulating digital assets and preventing misuse.
- For Judiciary: Sets a precedent for treating crypto-linked frauds with the same seriousness as traditional financial crimes.
Industry and Expert Reactions
- Legal Experts: Welcomed the move, noting that bringing VDAs under PMLA closes regulatory loopholes.
- Crypto Exchanges: Expressed concern over compliance burdens but acknowledged the need for transparency.
- Tax Professionals: Warned investors to disclose all crypto holdings to avoid penalties.
- Public Opinion: Divided between supporting stricter regulation and fearing over-regulation that may stifle innovation.
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Conclusion
The ED’s attachment of ₹4,190 crore in crypto-related cases and declaration of one accused as a Fugitive Economic Offender marks a watershed moment in India’s regulation of digital assets. Coupled with CBDT’s detection of ₹888 crore undisclosed income, the crackdown highlights the government’s determination to ensure transparency, accountability, and compliance in the crypto sector.
This ruling will likely reshape India’s crypto landscape, compelling investors and exchanges to adopt stricter compliance practices while reinforcing the government’s stance that digital assets must operate within the framework of law.
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