India's DRI Says Smugglers Ditching Hawala Networks for Stablecoins
India’s Directorate of Revenue Intelligence warns that cryptocurrencies and stablecoins are increasingly used in drug and gold smuggling, enabling rapid, anonymous international fund transfers outside formal oversight. The agency highlights that digital assets’ decentralized and pseudonymous nature makes them attractive for illicit payments, citing a transnational gold smuggling case involving over $12.7 million routed to China via hawala and Tether (USDT). Smugglers used multiple crypto wallets and encrypted apps for layered, untraceable transactions. The lack of comprehensive global crypto regulations creates gaps exploited by criminals. Experts suggest robust regulatory frameworks—rather than blanket bans—are needed to ensure compliance, enforce KYC, and protect consumers, in addition to specialized law enforcement training in virtual asset investigations. The report also references recent Indian crackdowns on cybercrime and darknet drug operations facilitated by crypto. While blockchain offers some traceability benefits, the report stresses urgent need for stronger regulations, advanced forensic tools, and international cooperation to effectively target crypto-enabled crime.
