India’s Directorate of Revenue Intelligence says criminal groups now shift from traditional hawala channels to digital stablecoins, creating new challenges for agencies that fight organised smuggling. The agency notes that traffickers move drug and gold proceeds through fast crypto rails that avoid traditional oversight.
Criminal Groups Adopting Crypto
The new Smuggling in India Report 2024-25 shows how smugglers adopt stablecoins for instant settlement. The report states that crypto offers decentralised movement, pseudonymous activity, and borderless transfers. The DRI writes that digital assets enable “faster and anonymous settlement, minimal oversight, and weak anti-money laundering compliance.”
Officials say this shift grows quickly because criminals value speed, quiet settlement, and global reach. Additionally, traffickers now use multiple wallets, offshore exchanges, and private communication channels to avoid direct detection.
The agency cites a 108-kg gold case as a recent example. Investigators say a Chinese organiser moved more than $12.7 million to China through hawala and USDT after the gold sale.
They uncovered wallet IDs, encrypted chats, and transaction hashes during the probe. Furthermore, the agency says this case reveals a maturing crypto-hawala model that blends old networks with new technology.
Related: India’s Crypto Shift: ‘Bharat’ and Women Drive Shift to Long-Term Wealth Creation
Regulatory Gaps Encourage Misuse
Experts say regulators now face an urgent need to update rules. Musheer Ahmed from Finstep Asia noted that gaps across markets encourage abuse because many jurisdictions lack complete frameworks.
He added that comprehensive rules allow authorities to enforce compliance, apply KYC checks, and monitor large transactions. Besides, stronger standards can support safer tokenised commerce and limit misuse by cross-border crime groups.
Officials in India also highlight recent cybercrime and drug cases that involve digital assets. Investigators seized crypto linked to darknet drug sales and international fraud rings. Consequently, enforcement teams now push for advanced forensic tools that map complex transaction paths across chains.
The DRI says blockchain data still offers critical intelligence opportunities. However, the agency urges stronger regulations, better training, and deeper cooperation. It states that the evolving digital environment demands “stronger regulatory frameworks, enhanced Anti Money Laundering compliance, and advanced forensic tools.”
Related: India Moves Toward a Digital Rupee Layer as Polygon Positions Its Rails
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