India’s cryptocurrency sector has been rocked by a massive scandal as investigators revealed that 27 crypto exchanges siphoned off Rs 623 crore through illegal money transfers. The case, dubbed the Coin Laundry Scandal, highlights how digital asset platforms are increasingly being misused for financial crimes.
Massive Crypto Laundering Operation Exposed
According to the Home Ministry’s Indian Cyber Crime Coordination Centre (I4C), the laundering took place between January 2024 and September 2025. Officials confirmed that these exchanges acted as channels for criminals to move stolen funds across borders.
The scale of the operation has drawn comparisons to global investigations such as the Panama Papers and Paradise Papers.
Investigators studied 144 cases reported in the last three years, uncovering complex money trails that linked domestic frauds to international networks.
“This is one of the most sophisticated laundering models we have seen in India’s cybercrime ecosystem,” an official told The Indian Express.
Victims and Financial Impact
The scandal has affected thousands of unsuspecting investors. Reports suggest that over 2,800 victims lost money during the laundering process.
The siphoned amount of Rs 623 crore underscores the vulnerability of India’s fast-growing crypto market, which has often operated in regulatory grey zones.
Experts warn that without stronger oversight, virtual asset service providers could continue to be exploited. “Crypto exchanges must adopt stricter compliance measures to prevent misuse,” said a cybercrime analyst.
Global Investigation and Indian Connection
The revelations are part of a wider probe led by the International Consortium of Investigative Journalists (ICIJ). Over 113 journalists from 38 organizations collaborated to expose how cryptocurrency exchanges worldwide are enabling illicit money flows.
For India, The Indian Express spearheaded the investigation, bringing the scandal into public view.
According to Financial Express, the Coin Laundry project has placed India’s crypto industry under intense scrutiny. Regulators are now expected to tighten rules to safeguard investors and restore trust in digital finance.
What Lies Ahead
The government is likely to push for stricter Know Your Customer (KYC) norms and enhanced monitoring of crypto transactions.
Industry insiders believe this scandal could accelerate the creation of a comprehensive regulatory framework for digital assets in India.
