ED tracking $1m transfer to 'meddle in domestic affairs'; 2 foreign entities under probe

Agency mounts investigation against two foreign entities

NEW DELHI: The Enforcement Directorate (ED) has initiated an investigation against two foreign entities for their alleged involvement in India's domestic affairs and in connection with a suspicious transfer of $1 million to a UK-based firm having links to India. ED has identified TCC Digital Markets Ltd, a firm registered in the tax haven of Saint Kitts and Nevis, as the source of funds that reached entities and individuals in India through layered transactions, moving across different jurisdictions, including Germany, Dubai, Lithuania, Canada, St Kitts and the UK.

Dr Matthias Karl Vogt Trust of Germany has been identified as the actual source of the $1 million fund, which was transferred to a UK-based entity through layered transactions before being moved to India. The German trust had first transferred the funds to XBase Digital UAB (Lithuania) to get around German law, according to a senior official aware of the probe.

Initial probe led the agency to an undated letter from Dr Matthias Vogt, which stated that the payment was made in digital currency. Intelligence gathered by the agency revealed that digital assets were suspected to have come from 'hawala' (illegal money transfers) to Dubai and to the Lithuanian entity, before they were moved to the UK.

The UK-based firm, recipient of Vogt's money, received $1 million between Feb and March 2026 in its Airwallex (UK) Ltd account. The money passed through multiple layers of different channels and entities, including one registered in Lithuania.

It finally took the form of a "grant" from the Saint Kitts and Nevis islands-registered firm, which transferred the funds in two tranches of GB,67,006 and GB,71,746 to the UK firm, before they reached end users in India, sources familiar with the investigation said. The Caribbean islands are known as a tax haven convenient for laundering proceeds of crime by global economic offenders.

The enforcement agency has come across another transaction by a Canadian-registered entity, ZBase Digital Inc, which had transferred $500,000 in Feb to the same UK firm's Airwallex account. Indian agencies are in the process of verifying these details with the Airwallex. The combined value of the two alleged transactions comes to $1.5 million.