Indian law enforcement accuses WazirX exchange of aiding in laundering of $130M
India's ED which investigates financial crime has frozen the WazirX bank account while it looks at transfers from instant loan companies to international wallets.
India's Enforcement Directorate (ED) is looking at cryptocurrency exchanges suspected of processing transactions that sent more than 10 billion rupees or about $130 million from firms under investigation to international wallets. at least ten crypto exchanges are allegedly involved
According to Economic Times, and bank account of exchange WazirX has been frozen the newspaper reported.
Transactions of up to 1 billion rupees of $1.3 million, or $1.3 million were allegedly made in the names of people with no connections to the money by companies under investigation in a case involving instant loans these companies often had ties to China. Even though know your customer/anti-money laundering procedures showed the transactions to be suspicious no enhanced due diligence was performed and no suspicious transaction reports were filed with the ED.
The ED froze WazirX bank accounts, including 647 million rupees or $8.1 million. alleging that the exchange had assisted about 16 fintech companies under investigation for money laundering.
WazirX published a statement on its blog Tuesday on behalf of Zanmai Labs Pvt. Ltd, which it said co-operates with WazirXalong with Binance said that all users are subject to KYC/AML processes and the exchange cooperates fully with law enforcement for every transaction we can produce the KYC details of the relevant user.
The accusations against WazirX have drawn attention to its opaque ownership structure and the role Binance plays in it. Binance CEO Changpeng Zhao tweeted Aug 5 that his company did not complete the acquisition of WazirX declared in 2019.
The next day in an exchange with WazirX co-Founder Nischal Shetty CZ expressed we asked for transferring of the WazirX system source code. deployment operations as recently as Feb this year.
1/ Deal involved Binance Parent entity— Nischal (Shardeum) (@NischalShetty) August 6, 2022
After some media reports on Binance structure, we asked about it
We were given an ambiguous answer that parent entity is under restructuring
It’s been many months, still waiting for Binance Parent entity
Can Binance name Parent entity? https://t.co/5oehKqaTxp
According to the Nischal Shetty deal involved the Binance parent entity after a few media reports on the Binance structure, we asked about it We were given an ambiguous answer that the parent entity is under restructuring it's been many months, still waiting for the Binance parent entity.
Binance CEO Changpeng Zhao replay to Nischal Shetty "Fact: we asked transferring of WazirX system source code, deploymnet operations as recently as Feb this year This was refused by WazirX Binance do not have control on their system. WazirX has been uncooperative with us as well ED"
This investigation was not the first time WazirX has been accused of inadequate AML measures in 2021. WazirX was implicated by the ED in the money laundering of illegal online gambling proceeds also with a Chinese connection.