The Indian Ministry of Finance confirmed WazirX is being investigated for money laundering
Indian Crypto exchange Giant WazirX Probed in India for Alleged Money Laundering of Over $350M
The Indian Ministry of Finance Confirmed on Aug 2 that crypto exchange WazirX is being investigated for money laundering and flouting forex rules in two cases.
Pankaj Chaudhary Minister of State for Finance, in the Parliamentary Upper House, that the Directorate of Enforcement is looking into claims that a total of Rs 2,790 crore over $350 million was laundered through the cryptocurrency exchange WazirX.
WazirX which was acquired by total by Binance in 2019, was reportedly one of the several domestic exchanges which were under the scanner for non-compliance with foreign exchange which was under the scanner for non-compliance with foreign exchange rules and money laundering guidelines.
Nirmala Sitaraman, Finance Minister of India, has now confirmed that the ED is investigating the platform on two cases involving cryptocurrency under the provisions of the Foreign Exchange Management Act, 1999 (FEMA).
WazirX is operated by Zanmai Labs Private Limited in India using the walled infrastructure of Cayman island-based exchange Binance. it has been found that all crypto transactions between these two exchanges were not even being recorded on the blockchains and were thus cloaked in mystery. Said Chaudhary.
He also claimed in the Rajya Sabha that a Show Cause Notice(SCN) has been issued under the FEMA provisions against WazirX for permitting the outside repatriation of cryptocurrency assets worth $350 million (Rs. 2,790 Crore) to unidentified wallets.
Additionally, The minister expressed that in a different case it was seen that the Indian Exchange also allowed foreign users to exchange one cryptocurrency for another on its own platform as well by using transfers from other exchanges including FTX and Binance.
This response came after Rajya Sabha member Sushil Kumar Modi enquired whether or not some cryptocurrency exchanges permitted users from countries like U.S and Germany to transact without KYC and AML compliance, insufficient disclosures, and agreements while carrying out third-party transfers.
Furthermore, The Finance ministry once again reiterated global collaboration to regulate cryptocurrencies.
“Therefore, any policy framework on cryptocurrency can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards,” he said.