Malappuram (Kerala) | The Income Tax (IT) Investigation Wing has unearthed a major hawala racket involving cryptocurrency transactions allegedly operated by two Malappuram natives under the guise of a flower export firm, officials said on Saturday.
An IT official said that its Investigation Wing in Kochi has been conducting searches over the past three days at various locations in Malappuram and Kozhikode districts as part of the probe.
The investigation was launched against a firm owned by two Malappuram natives, who have been exporting flowers to Indonesia for several years, the official said.
According to investigators, the duo received payments from Indonesia via cryptocurrency channels rather than traditional banking systems.
To conceal the money trail, they allegedly created multiple crypto wallets under the names of different individuals, including students.
One persons reportedly managed operations in Malappuram and Kozhikode, while the other is currently based in Saudi Arabia.
Preliminary estimates suggest that transactions worth around Rs 330 crore were routed through cryptocurrencies, though the exact figure will be determined after examining the digital wallets, officials said.
The IT Department is expected to refer the case to the Enforcement Directorate (ED) for further investigation under the Foreign Exchange Management Act (FEMA) as the transactions constitute violations of foreign exchange regulations.
IT will also recommend ED to probe into the money laundering aspect, official added
