Increase in Hawala Transactions via Cryptocurrency in Kerala: Majority from Dubai to Kerala
Thiruvananthapuram, July 12, 2025:
The Kerala Cyber Crime Department has noted a significant increase in hawala transactions facilitated through cryptocurrency within the state. The majority of these unregulated money exchanges reportedly originate from Dubai and flow into Kerala, though transfers from Kerala to foreign countries have also been detected.
Cryptocurrency as a Channel for Hawala Transactions
Sources from the cyber crime division have explained that the process typically involves cryptocurrency agents operating both outside and inside the country. When money is handed over to a crypto agent abroad, it is converted into cryptocurrency and credited to digital wallets. The equivalent amount is then paid out in Indian Rupees by authorized crypto agents within Kerala without physically transferring the foreign currency.
This method is increasingly being exploited to transfer proceeds from online scams and frauds, which are converted into cryptocurrency and moved through these virtual platforms to evade detection and regulation.
Challenges Faced by Authorities
Most foreign crypto agents involved in these transactions use unregistered platforms outside India, making it difficult for authorities to trace transactions or gather detailed information. However, investigations have revealed that some registered platforms, including those in China, are also being used for such cross-border transfers, and the cyber crime department has obtained account details from these entities for further scrutiny.
Aware of the misuse of cryptocurrencies for tax evasion and money laundering, the Income Tax Department had conducted a crack-down in Kerala three months ago. Over a dozen bank accounts suspected of handling illegal crypto-linked transactions were frozen, including those connected to a single crypto agent involved with more than 500 bank accounts.
Rising Cases of Crypto Investment Frauds
Authorities have also expressed concern over the proliferation of fraudulent investment schemes promoted through fake apps promising high returns on cryptocurrency investments. Many victims are only able to recognize the fraud when they attempt to withdraw their funds and discover that their money is inaccessible. Cyber crime officials are actively investigating these cases alongside hawala-related transactions.
Conclusion
The surge in cryptocurrency-facilitated hawala transactions presents a new challenge for law enforcement agencies in Kerala. The cyber and tax authorities are intensifying their efforts to crackdown on these illegal financial networks to curb the misuse of cryptocurrencies for illicit money transfers and financial scams.
For more updates on cryptocurrency and cyber crime in Kerala, stay tuned to Mathrubhumi News.