India’s anti-money laundering agency conducted searches on Thursday at five premises of a16z-backed crypto exchange CoinSwitch Kuber, alleging violations of forex laws, a person with knowledge of the matter said.

The Enforcement Directorate searched office facilities and residences of directors and the CEO. The exchange is under suspicion of acquiring shares of over ₹2,000 crore ($250 million) in contravention of forex laws, the person said, asking not to be named as the matter isn’t public. The exchange was also found non-compliant with certain know-your-customer norms, the person said.

“We receive queries from various government agencies,” a spokesperson for CoinSwitch said. “Our approach has always been that of transparency. Crypto is an early stage industry with a lot of potential and we continuously engage with all stakeholders.”

An Enforcement Directorate spokesperson did not respond to calls for comment. 

The Bengaluru-based exchange, which is backed by Tiger Global, Sequoia and Coinbase Ventures, is one of India’s largest crypto exchanges. It achieved unicorn status last year during a funding round led by Andreessen Horowitz. 

In hot waters

The development spells further trouble for the crypto sector, which has faced scrutiny from the Indian authorities over potential money laundering through instant loan apps and the purchase and transfer of virtual crypto assets.

Last year, the agency issued a show-cause notice to WazirX cryptocurrency exchange over alleged contravention of forex laws involving cryptocurrencies worth ₹2,790 crore ($382 million).

The agency earlier this month froze WazirX assets worth $8.2 million in relation to the instant loan app case. It also froze assets worth ₹370 crore (nearly $46 million) of crypto asset lender Vauld.