Urgent Call for Stricter Regulations and Global Unity to Combat Illicit Crypto Transactions, Declares DRI
New Delhi: The Directorate of Revenue Intelligence (DRI) has drawn attention to the alarming rise in the use of cryptocurrencies for smuggling and money laundering, emphasizing the need for robust regulatory frameworks and enhanced global cooperation. In its recently released report, “Smuggling in India 2024-2025,” the DRI identifies a concerning trend: the merging of traditional smuggling networks with modern digital financial systems.
The report highlights that cryptocurrencies, particularly stablecoins like USDT, are increasingly being adopted in smuggling operations, effectively substituting the traditional hawala system. Cryptocurrencies offer swift, anonymous transactions with minimal regulatory oversight, making them attractive for illicit activities. Hawala is an informal system of money transfer that operates outside conventional banking channels. The decentralized nature of cryptocurrencies enables traffickers to move funds easily and obscure the origins of their illicit gains.
Despite these challenges, the DRI acknowledges that the inherent traceability of blockchain transactions can be leveraged for financial investigations. “The DRI’s application of blockchain analytics marks a significant step in combating cryptocurrency-enabled crime,” the report states. However, it emphasizes that as digital assets evolve, there is an urgent need for enhanced anti-money laundering (AML) compliance and sophisticated forensic tools supported by international cooperation.
The report also details the role of cryptocurrencies in drug trafficking, noting how the digital landscape, paired with online anonymity, has transformed the sale of narcotics. Organized crime syndicates exploit the internet and dark web marketplaces, allowing transactions to occur in secure environments that are difficult to trace. “In gold and narcotics smuggling, proceeds are either transferred via hawala or sent as cryptocurrency to masterminds abroad,” it adds.
A notable case cited in the report involves the exposure of a transnational gold smuggling syndicate in July 2024. Authorities seized 108 kg of foreign-origin gold routed through the India-China border using trusted mules. Once sold in Delhi through jewellers and forex dealers, the proceeds exceeding ₹108 crore were remitted to China through hawala and USDT crypto wallets, evading scrutiny from regulatory bodies.
The DRI emphasizes that globalization has accelerated cross-border trade, creating new vulnerabilities that necessitate an intelligence-led approach to customs enforcement. As transnational crime leverages open borders, Indian Customs and the DRI are pivotal in protecting national security, public health, and consumer safety. They intercept illegal goods including narcotics, arms, and counterfeit items, ensuring economic security amidst growing threats.
Furthermore, the DRI cautioned that India’s expanding economy has been accompanied by a rise in complex commercial fraud involving practices like undervaluation, misdeclaration, and exploitation of export incentives. In the fiscal year 2024-25, the agency reported 542 cases of import fraud involving ₹2,606 crore in duty evasion, alongside 63 export fraud cases amounting to ₹123 crore in fraudulent benefits, underscoring the substantial scale and intricacies of commercial customs fraud.
This comprehensive analysis highlights the urgent need for enhanced safeguards against the misuse of cryptocurrencies in smuggling activities, calling for an adaptive and concerted response from both national and international authorities.
Original Source: https://www.livemint.com/news/stricter-regulatory-framework-global-cooperation-illicit-crypto-transactions-dri-money-laundering-11764862375650.html
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Publish Date: 2025-12-04 22:50:00
