As part of a probe into immediate private loan fraud, India’s Directorate of Enforcement (ED) has said it frozen approximately $8.1 million in money and searched a location related to crypto exchange WazirX.
WaxirX accounts are frozen due to a breach of laundering regulations.
The Directorate of Enforcement accused WazirX of facilitating transactions through unidentified fintech firms “to purchase crypto assets and then launder them abroad” as a part of a plan comprising Chinese-backed businesses evading India’s licensing requirements, according to a statement released on Friday. The ED claimed that as part of its investigation, it searched a location associated to co-founder Sameer Mhatre and directed WazirX accounts holding 646.7 million Indian rupees to be frozen.
The regulator stated that the inquiry was still ongoing. The ED asserted that WazirX and Binance’s transactions were subject to “weak regulatory oversight” and “low KYC rules” and that the crypto exchange failed to keep track of the necessary data to confirm the source of the funds used to commit the alleged fraud.
WazirX turned down a request to provide information on transactions APP firms
The ED stated that despite multiple requests, WazirX declined to provide the cryptocurrency transactions of the questionable fintech APP firms and expose the wallets’ KYC.
“WazirX is not able to give any account for the missing crypto assets. It has made no efforts to trace these crypto assets. By encouraging obscurity and having lax AML norms, it has actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route,” added the ED.
Binance CEO Changpeng Zhao stated on Friday that the company had no stake in Zanmai Labs, the company running WazirX. Zhao added that B “Binance simply offers wallet solutions for WazirX, and it is WazirX that is in charge of managing KYC and other exchange-related activities.
Nischal Shetty, the director of WazirX, refuted many of CZ’s assertions on Twitter by stating that Binance Zanmai Labs purchased the cryptocurrency exchange. Furthermore, he said that running cryptocurrency trading pairs and handling withdrawals was under the purview of Binance.
