Regulators, led by the Central Bank of Sri Lanka, have flagged the risks posed by unregulated crypto activity, particularly the ease with which funds can be transferred across borders without oversight. This has raised alarms about capital flight and the potential use of digital currencies to conceal proceeds from illegal activities.
Law enforcement agencies, including the CID are now actively investigating several high-profile cases. One major probe involves the alleged laundering of Rs. 290 million through global crypto exchange Binance. Authorities claim suspects exploited loopholes in foreign exchange regulations to convert public funds into cryptocurrency, enabling them to move money the country undetected.
