India freezes 64.67 crore ($8.1M) of WazirX’s funds for money laundering probe
The Indian Enforcement Department (ED) IndiaToday has ordered the freezing of WazirX bank accounts worth 64.67 billion rupees (approximately $8.1 million) in connection with a money laundering investigation. Reported on August 5th.
India investigating money laundering
The report reveals that several cryptocurrency exchanges and other private financial institutions in India are under investigation for money laundering practices.
The first investigation involved a non-bank financial company (NBCF) for predatory lending practices that violated Reserve Bank of India guidelines.
However, authorities soon discovered that several fintech firms in the country that had failed to obtain licenses were operating using licenses from the defunct NBCF.
A survey found that most of these fintech companies closed their operations and spent their profits on buying crypto assets.
WazirX connection
According to regulators, WazirX received most of these funds, which have now been transferred to foreign wallets.
Financial regulators alleged that WazirX provided contradictory and vague information throughout the investigation.
Zanmai Labs Pvt Ltd, the company that owns the WazirX Crypto Exchange, has created a web of contracts with Crowdfire Inc. USA, Binance (Cayman Islands) and Zettai Pte Ltd Singapore to obscure ownership of the crypto exchange.
Initially, WazirX said it controls all Indian rupee-to-crypto and crypto-to-crypto trading on the exchange. However, Binance has since changed its tone, saying that it is only responsible for trading Indian rupees into cryptocurrencies, while Binance controls everything else in an attempt to evade regulatory scrutiny.
ED continued that WazirX directors failed to cooperate during the investigation after several offers from the agency.
This lack of cooperation has led to the exchange’s “loose KYC standards, lax regulatory control of transactions between WazirX and Binance, non-recording of transactions on the blockchain to save costs, and wallets on the other side.” KYC of
The regulator added that the exchange made no effort to recover the crypto assets involved in the investigation. For these reasons, its “64.67 crore range of motion” was frozen.
By fostering ambiguity and laxing AML standards, we have actively backed about 16 accused fintech companies that use virtual roots to launder criminal proceeds.
As of press time, WazirX has not yet responded to CryptoSlate’s request for comment on the matter.
