Tamil Nadu DGP launches handbook for investigating crypto crimes

In a significant step towards strengthening law enforcement's ability to tackle crypto-related crimes, Tamil Nadu's Director General of Police (DGP) Shankar Jiwal has launched the 'Handbook for Investigations into Virtual Digital Assets.'

The guide is designed to help police officials navigate the complexities of crimes involving virtual digital assets (VDAs), including money laundering, Ponzi schemes, and cyber fraud.

The rise of Web3 technologies has been accompanied by an increase in cyber threats and concerns over the misuse of digital assets for criminal activities.

Recognising this challenge, India's law enforcement agencies are actively working to equip their personnel with the necessary expertise to handle crypto-related cases.

The handbook was developed through a collaboration between Hash Legal, a Bengaluru-based tech law firm, and the Giottus crypto exchange. It provides a structured approach to investigating crypto crimes, offering insights into legal frameworks, transaction tracking methods, and international case handling.

At the launch event, DGP Shankar Jiwal highlighted the importance of equipping police officers with specialised tools and training to handle crypto cases effectively.

Giottus CEO Vikram Subburaj emphasised the need for hands-on training, pointing out that many officers still struggle with fundamental questions like, “Is crypto legal in India?” and “Can crypto-related crimes be investigated successfully?” This knowledge gap motivated the development of a structured guide to simplify the investigative process.

Athif Ahmed, Partner at Hash Legal, noted that the handbook was carefully designed to ensure law enforcement officers understand India's current crypto regulations and are equipped with practical tools to investigate such offenses. He stressed the importance of handling crypto crime victims with empathy and ensuring a balanced legal approach.

The handbook will be distributed to police officials nationwide, followed by training sessions to help them develop the skills needed to track, trace, and prosecute crypto-related offenses effectively.

India has yet to finalise comprehensive regulations for cryptocurrencies. Currently, digital asset firms must comply with the Prevention of Money Laundering Act (PMLA), 2002, and register with the Financial Intelligence Unit (FIU) of India to operate legally. However, the lack of clear regulatory frameworks has led to an increase in crypto-related crimes.

In 2023, Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha that the Enforcement Directorate (ED) had seized crypto assets worth Rs. 936.89 crore as part of its efforts to combat fraud. Additionally, in February 2023, the ED seized cryptocurrency worth Rs. 1,646 crore in a large-scale money laundering investigation.

Despite these crackdowns, crypto-related crimes continue to rise. Last year, leading crypto exchange WazirX was hacked, resulting in a theft of over $230 million (approximately Rs. 1,900 crore).

Recognising the urgent need for stronger security measures, IIT Kanpur announced in 2022 that it was developing a tool to help law enforcement agencies in Uttar Pradesh analyse crypto transactions and identify fraudulent activities.