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127 Smuggling in India Report 2024-25

Shared crypto wallet Shared crypto wallet
address & crypto address & crypto
transfer receipt transfer receipt
Forex dealers &
Mastermind in China Mastermind in India
aggregators of buyers
Shared crypto wallet
address & crypto
transfer receipt
Other country-based
Recipient Wallets (Crypto crypto dealer New Delhi-based forex
A/Cs shared by Chinese dealer/gold buyer/crypto
transferred crypto against
mastermind dealer
cash via hawala
Layer 2: Wallet 1
Transfer of crypto Transfer of
crypto against
gold/cash
Layer 1: Wallet 1
Transfer of crypto
Sending Wallet Layer 1: Wallet 2
Layer 1: Wallet n
Transfer of crypto
Layer 2: Wallet 2

Figure 1: Crypto-hawala network investigation in 108 kg gold seizure by DRI

Conclusion

There is a growing convergence between traditional smuggling networks and
emerging digital financial systems. Cryptocurrencies, with their decentralized and
pseudonymous nature, have provided traffickers new means to transfer funds and
conceal illicit profits, making detection and enforcement increasingly complex.
However, the traceability of blockchain transactions also offers opportunities to
enhance intelligence gathering and financial investigations through advanced
analytics.

The DRI’s application of blockchain analytics to trace cryptocurrency transactions
marks a significant step in combating crypto-enabled crime. However, the evolv-
ing nature of digital assets demands stronger regulatory frameworks, enhanced
Anti Money Laundering (AML) compliance, and advanced forensic tools, support-
ed by global cooperation to curb cryptocurrency misuse.

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