Trouble for crypto exchange WazirX, ED freezes Rs 64.67 crore
Enforcement Directorate claims that WazirX alleged assisted around 16 fintech companies in laundering the proceeds of crime using the crypto route by encouraging obscurity and having lax AML (anti-money laundering) norms.
Bank deposits worth Rs 64.67 crore of cryptocurrency exchange WazirX have been frozen by the Enforcement Directorate as part of a money laundering probe.
The Enforcement Directorate had, on August 3, conducted raids in Hyderabad against a director of Zanmai Lab Pvt Limited, which owns WazirX. The agency claimed that he was "non-cooperative".
The agency's probe against the crypto exchange is linked to its ongoing investigation against a number of Chinese loan apps (mobile applications) working in India.
The agency had charged WazirX last year for alleged contravention of the Foreign Exchange Management Act (FEMA).
"It was found that WazirX Director Sameer Mhatre has complete remote access to the WazirX database. But despite that, he did not provide details of the transactions relating to crypto assets purchased from the proceeds of crime of instant loan app fraud," the ED claimed in a statement.
"WazirX has been unable to give any account for the missing crypto assets due to lax KYC norms, non-recording of transactions on blockchains to save costs, loose regulatory control of transactions between WazirX and Binance, and non-recording of the KYC of the opposite wallets," the ED further claimed.
Stating that WazirX made no efforts to trace these crypto assets, the Enforcement Directorate claimed that the firm had actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route by encouraging obscurity and having lax AML (anti-money laundering) norms.
Therefore, the Enforcement Directorate said, equivalent movable assets of WazirX to the tune of Rs 64.67 crore were frozen under the Prevention of Money Laundering Act (PMLA).