Crypto payments now preferred by drug dealers, says Indian NCB

In this post:

  • Cryptocurrency discovered to be the medium for hard drug purchases into India
  • Crypto exchange regulations suggested in India
  • Cryptocurrency purchase of hard drugs saw Indian youth recently arrested

Law enforcement agencies in India have discovered that most drug dealers have shifted to crypto payments as a method for buying hard drugs into the country, from across the border. Due to the anonymity with digital currencies, it is almost difficult for the agencies to trace the people behind the transactions. Crypto exchanges in India are looking to step up security measures to curb such transactions. 

Drug dealers are foxing agencies with crypto payments

India’s federal law enforcement and intelligence agency, Narcotics Control Bureau (NCB) learned about the new payment strategy after an investigation carried out under the Narcotic Drugs & Psychotropic Substances (NDPS). The investigation also led up to the discovery of the increasing cross-border transactions in Mumbai, Delhi, Bengaluru, and Goa, for contraband items. 

As New Indian Express reported today, NCB mentioned that crypto payments were mostly used in smuggling drugs and other contraband items from darknet marketplaces in the United States and Canada to India. Consequently, these crypto payments have been foxing the agencies from effectively policing the smuggling of contraband goods. 

Supreme Court advocate, arbitrator, and domain expert on cyber laws and forensics, Neeraj Aarora, commented: 

It is a dangerous trend because cryptocurrency can be bought from a hawala operator and can be used for making payments for the contraband. It will be very difficult for the law enforcement agencies to find out the origin of cryptocurrency in such a case.

Crypto exchanges must be regulated

The founder of WazirX, Nischal Shetty opined that the country ought to adopt a positive regulation for cryptocurrencies in order to ensure the use of crypto payments for drugs will be mitigated. To keep a clean crypto ecosystem in India, however, exchanges in the country must be regulated thoroughly and equipped with adequate security measures. 

Shetty added:

We are working on a code of conduct for cryptocurrency companies in India, which lays out a guideline for Know Your Customer/Anti Money Laundering (KYC/ AML) and other regulatory-related features. This will help curb illegal activities as well as scams. This way, exchanges can also help the law enforcement agencies as well as educate the masses.

Recently, an Indian youth was arrested by law enforcement agencies after buying several hard drugs using cryptocurrencies.

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