- WazirX is accused of assisting 16 fintech companies in money laundering.
- ED initiated the search operation on WazirX on August 3.
India’s Directorate of Enforcement (ED) has taken a strong stance in the ongoing probe into the prominent Indian crypto exchange WazirX. On Friday, the ED confirmed a raid on Sameer Mhatre, one of the directors of Zanmai Labs Private Limited, the parent company of WazirX. Also, as per the official statement, ED has frozen nearly 64.67 crores INR or 8.142 million USD worth of assets of WazirX under the Prevention of Money Laundering Act, 2002 (PMLA).
ED searches the Director of WazirX Crypto-Currency Exchange & freezes its Bank assets worth Rs 64.67 Crore for assisting accused Instant Loan APP Companies in laundering of fraud money via purchase & transfer of virtual crypto assets.
— ED (@dir_ed) August 5, 2022
WazirX Under Crucial Surveillance
ED, a regulatory authority that oversees economic crimes in India, takes this serious action against WazirX for allegedly aiding fraudulent China-based Instant Loan App companies in money laundering by facilitating the purchase and transfer of virtual crypto assets.
On Wednesday, State Minister for Finance confirmed the issuance of the Show Cause Notice (SCN) under FEMA to WazirX. The Indian crypto exchange is accused of permitting crypto assets transactions of more than $350 million USD in value to unknown wallets.
After being acquired by the largest crypto exchange Binance in 2019, all crypto to crypto-related transactions on WazirX are controlled by Binance and the fiat (INR) to crypto transactions are maintained by Zanmai.
According to the regulators’ accusations, the recent transactions on WazirX’s platform are not recorded on the blockchain. The exchange also has not turned up to officially clear this accusation. Despite having central access to the platform’s database, Sameer Mhatre, Director of WazirX, seems to be reluctant in unveiling the details of the crypto transactions.
The Directorate of Enforcement (ED) stated:
“The lax KYC norms, loose regulatory control of transactions between WazirX & Binance, non-recording of transactions on Blockchains to save costs and non recording of the KYC of the opposite wallets has ensured that WazirX is not able to give any account for the missing crypto assets. It has made no efforts to trace these crypto assets.”
The regulatory authority is now seriously investigating several non-banking finance companies (NBFCs), crypto exchanges, and fintech firms to prevent money laundering and foreign exchange violations.
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