India cracks down on darknet drug deals using crypto tracking

India’s Narcotics Control Bureau (NCB) is actively monitoring cryptocurrency payments on the darknet as part of its ongoing efforts to combat drug trafficking in the country.

During a Parliamentary discussion on July 24, Nityanand Rai, the minister of state for home affairs, revealed India’s current strategy to reduce the import and inter-state movement of narcotic drugs.

Countering drug trafficking on the darknet

According to data from NCB, the nodal drug law enforcement and intelligence agency of India, the use of cryptocurrencies in drug crimes has been inconsistent over the last five years. However, the number of cases of drug seizure involving darknet and cryptocurrencies has seen a steady increase since 2022.

Rai detailed 13 plans of action against the growing problem of drug trafficking and narco-terrorism in India, two of which targeted the misuse of cryptocurrencies. He said:

“A Special Task Force on Darknet and Crypto Currency has been constituted to monitor suspicious transactions related to drugs on Darknet.”

Efforts to monitor crypto transactions

Additionally, the NCB is currently facilitating various training programs on digital forensics, darknet and cryptocurrency.

According to the National Crime Records Bureau (NCRB) data, Punjab recorded the most number of drug trafficking cases in India between 2020 to 2022.

Related: $235M WazirX exchange hack has implications for India’s crypto industry

Indian Finance Minister Nirmala Sitharaman’s 2024 Union Budget speech on July 23 failed to mention cryptocurrencies , leaving the existing tax regulations unchanged for another year. 

The Indian Ministry of Finance’s Financial Intelligence Unit  blocked Binance and several other offshore crypto exchanges in January 2024 for failing to adhere to the country’s Anti-Money Laundering Act.

However, the Indian government gave the exchange an opportunity to resume its services, provided it paid a $2 million fine for noncompliance.

Binance reportedly accounted for more than 90% of Indian crypto trading volume before its ban but now plans to reenter the Indian market  after obtaining approval from the Indian financial regulator.

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