The system involved converting undeclared cash payments into cryptocurrencies like Bitcoin and Tether through hawala operators.
Indian tax authorities have uncovered a complex money laundering scheme involving hawala networks and cryptocurrency transactions in Jaipur. THE investigationsparked by raids on local wedding planners, led to the seizure of $2 million (₹20 crore) in cash and jewelry. Officials also recovered three crypto wallets linked to the operation, including one linked to a major global exchange.
The scheme involved customers making undeclared cash payments exchanged for cryptocurrencies like Bitcoin and Tether through hawala operators in Gujarat and Rajasthan. Hawala, an illegal payment system, allows funds to be transferred abroad without physically moving the money. Authorities believe the perpetrators exploited crypto exchanges with weak KYC policies or intermediaries to launder funds.
Records of these activities, including WhatsApp messages, emails and spreadsheets, reveal that the network extends beyond Jaipur to cities like Mumbai, Hyderabad and Delhi. The operation also involved resorts, hotels and event service providers that accepted cash or bank payments. The tax department is planning more raids across India to crack down on tax evasion in the wedding and events sector.
