Gaming apps converting earnings to crypto, Rs 700 crore moved out of India, reveals GST probe

economictimes.indiatimes.com:

cryptocurrency and the utilization of networks of shell companies. As per a ToI report, at the center of one of the largest such networks under investigation stands Parimatch, a Cyprus-based group, that even engages in advertising during local sports leagues on television. The Directorate General of Goods & Services Tax Intelligence (DGGI) in Mumbai has recently managed to uncover and dismantle one such network linked to Parimatch.

The network was responsible for amassing Rs 700 crore from Indian users of gaming apps, and the funds were subsequently funneled out through conversion into cryptocurrency. The DGGI tracked network's activities for months, scrutinised the backgrounds of 50 entities and individuals in Delhi, along with 350 in Kolkata, TOI report stated. The majority of such gaming companies, which are headquartered in tax havens and illicitly operating within India, employ intricate layers of communication and transactions spanning international jurisdictions to circumvent legal action.

Dubai plays a pivotal role in facilitating the flow of funds through cryptocurrencies. The workers for these applications receive remuneration online without formal contracts. Parimatch, for instance, interacts with its Indian contacts solely through email, phone calls, or unidentified individuals.

The DGGI has recently apprehended the director of an unregistered payment aggregator that facilitated the collection of money in shell company accounts from users of Parimatch's gaming and betting services. The amassed funds were then channeled from the payment aggregator to the bank accounts of shell companies. In the process, more than 400 bank accounts were frozen.