India Launches Investigation Against Crypto Traders Hiding Income Through Offshore Binance Wallets
Date: 2025-10-13 Author: Henry Casey Categories: IN WORLD
The Indian Tax Department has launched a large-scale investigation into over 400 wealthy individuals suspected of concealing income from digital asset transactions. According to local media, traders used offshore Binance wallets to evade domestic tax obligations.
Following an order from India's Central Board of Direct Taxes (CBDT), investigators have been instructed to review financial transactions for the 2022-23 and 2024-25 financial years. The report is scheduled for October 17, 2025, after which further action will be taken against the violators.
Indian tax authorities have previously encountered similar schemes. During one $3.3 billion audit, authorities discovered undeclared crypto assets worth $124 million. Experts note that Binance's registration with the country's Financial Intelligence Unit (FIU) was a turning point, as Indian regulators can now access wallet data that had previously remained hidden.
The massive exodus of traders to offshore jurisdictions was driven by the excessively high tax burden on cryptocurrency transactions. In India, the tax on cryptocurrency income ranges from 33% to 38%, and has historically reached 42%. Additionally, each crypto transaction is subject to a 1% tax at source (TDS). This makes India one of the countries with the most stringent tax requirements for digital assets.
For this reason, many local investors seek to minimize risks and expenses by transferring assets abroad. It has become common practice to purchase stablecoins, such as USDT, domestically, then send them to foreign wallets and exchange them for other cryptocurrencies, such as Bitcoin or Ethereum. These transactions allow individuals to temporarily conceal their actual income, but following stricter regulations, such schemes are becoming increasingly unsafe.
Indian tax authorities have already sent over 44,000 notices to individuals suspected of violating cryptocurrency transaction reporting rules. The government intends to demonstrate its commitment to financial transparency and strengthen oversight of digital asset movements, especially amid growing public interest in the crypto market.
Therefore, the ongoing investigation against Binance users could become one of the largest cryptocurrency-related tax cases in Indian history and set a new standard for oversight in this area.
