ED Flags Cyber Fraud, IBC Misuse Among Top Risks, Sets Eight Priority Areas For Crackdown
India’s Enforcement Directorate Identifies Key Areas for Enhanced Financial Crime Enforcement
The Enforcement Directorate (ED) has outlined eight priority areas for intensified action, marking a shift towards intelligence-driven financial investigations. The agency has identified cyber fraud, misuse of the Insolvency and Bankruptcy Code (IBC), trade-based money laundering, and illegal online gambling as key concerns.
Cyber Fraud
Cyber fraud, including digital arrest scams and organized cross-border syndicates, has emerged as a significant threat. The ED has tasked its zonal units with identifying financial trails behind such operations, dismantling mule account networks, and mapping offshore linkages used to launder illicit gains.
Misuse of the Insolvency and Bankruptcy Code
The agency has also flagged potential misuse of the IBC framework, suspecting collusion among corporate debtors, resolution professionals, and members of committees of creditors. Officials have been instructed to scrutinize resolution processes where there are indications of asset undervaluation, fraudulent diversion of funds, or manipulation of insolvency proceedings.
Trade-Based Money Laundering
Trade-based money laundering has been highlighted as another critical threat, with investigators monitoring complex import-export transactions used to disguise illegal fund flows. Professional laundering channels operating under the cover of legitimate trade are under particular watch.
Illegal Online Betting and Gaming
The ED has also placed illegal online betting and gaming platforms high on its enforcement agenda, targeting not just the platforms but also their financial ecosystems, including payment gateways, shell entities, mule accounts, and offshore operators facilitating fund transfers.
Additionally, the agency will scrutinize drug trafficking networks and their hawala linkages, tracking the movement of narcotics proceeds through layered transactions and identifying assets acquired using laundered money.
Share Market Manipulation and Foreign Funding
The ED has flagged share market manipulation and foreign funding channels that could be used for unlawful influence operations or destabilizing activities. To address these threats, the agency has identified strengthening data integrity, consolidating intelligence inputs, and enhancing inter-agency coordination as key operational priorities.
International Cooperation
To bolster international cooperation, the ED will increase its use of mechanisms such as Interpol channels through the Bharatpol portal, financial intelligence sharing under the Egmont framework, and asset-tracing networks including ARIN-AP and the GlobE Network.
Prosecution and Adjudication
The agency has set a target of filing 500 prosecution complaints in the current financial year and has reiterated its commitment to completing adjudication of pending cases under the erstwhile Foreign Exchange Regulation Act (FERA) and the Foreign Exchange Management Act (FEMA) by March 31, 2026.
The ED’s enhanced focus on financial crime enforcement aims to combat the increasingly complex and sophisticated threats facing India’s financial system.
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