Thiruvananthapuram: Hawala transactions using cryptocurrency are reportedly on the rise in Kerala, with a significant portion of transfers originating from Dubai. The state cyber department has also uncovered reverse transactions, money being sent from Kerala to foreign countries, often tied to online fraud.

In this system, individuals hand over money to a local crypto agent, who then coordinates with a corresponding agent abroad. Instead of directly transferring funds across borders, the foreign agent invests the amount in cryptocurrency and uses illicit funds, often previously acquired through online fraud, stored in digital wallets to pay the requested amount in Indian rupees to the intended recipient. This effectively converts cryptocurrency transactions into a channel for laundering and transferring fraudulent money.

The cybercrime department has identified multiple such instances. Since the agents operate on unregistered international crypto platforms, it becomes extremely difficult to trace the origins or details of these transactions. Some operations have also been traced to registered platforms, including those based in China. According to Cyber Investigation Division officials, they have managed to gather account-related data from certain offshore platforms.

Three months ago, the Income Tax Department carried out inspections in Kerala after suspecting crypto-based tax evasion. During this probe, more than 10 bank accounts were frozen. Authorities also found a crypto agent who allegedly operated nearly 500 bank accounts.

Meanwhile, officials warn that fraudulent investment apps promising high returns through cryptocurrency are also on the rise. Victims typically realise they’ve been scammed only when they attempt to withdraw their money. Investigations into these fake platforms are also underway.