India’s Enforcement Directorate issued show-cause notice to WazirX exchange
The agency said it has issued Show Cause Notice to WazirX Cryptocurrency Exchange for contravention of FEMA (Foreign Exchange Management Act), 1999.
Enforcement Directorate (ED), India’s financial crime-fighting agency, has purportedly issued a show-cause notice to the founder of WazirX exchange, Nischal Shetty, and the director Sameer Mhatre.
ED has issued Show Cause Notice to WazirX Crypto-currency Exchange for contravention of FEMA, 1999 for transactions involving crypto-currencies worth Rs. 2790.74 Crore.— ED (@dir_ed) June 11, 2021
According to a report published by Reuters, India’s financial crime-fighting organization has contacted the two executives in regards to transactions worth ₹2,790.74 crores (approximately $382 million).
The agency accused the exchange of failing to collect required documents to carry out know-your-customer (KYC) verifications. In addition, the exchange is suspected for violating foreign exchange regulations.
However, Nischal Shetty clarifies that they haven’t actually received any official documents yet from the agency.
1/3— Nischal (WazirX) ⚡️ (@NischalShetty) June 11, 2021
WazirX is yet to receive any show cause notice from the Enforcement Directorate as mentioned in today's media reports.
WazirX is in compliance with all applicable laws.
"We go beyond our legal obligations by following Know Your Customer (KYC) and Anti Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required,” Shetty said.
India already has a controversial history with the cryptocurrency industry, starting a few years back when the nation’s central bank banned organizations working with it to operate with any companies even remotely associated with the industry. Although the Supreme Court of the country reversed this directive in 2020.
The government was set to present a bill to parliament by March that proposed a ban on cryptocurrencies, making trading and holding them illegal. But the bill was not tabled in the session and since then conflicting statements have added to the uncertainty over the bill’s fate.
Recently, the more positive news came across the country that India is now reportedly abandoning its plans to ban cryptocurrencies and classify it as asset.