Exchanges

WazirX exchange under investigation for suspected money laundering

  • WazirX is under investigations for suspected money launder activities
  • The Binance-owned platform was used to launder money via cryptocurrencies
  • India’s crypto regulatory environment remains a complicated one

Indian regulators are currently investigating Binance-owned crypto exchange WazirX for suspected involvement in money laundering.

Enforcement Directorate is investigating WazirX

Cryptocurrency exchange WazirX is under investigation for possible involvement in a money-laundering operation. The federal Enforcement Directorate (ED) in India announced earlier today that it had launched an investigation into the case.

According to the agency, the investigation is for a violation of India’s foreign exchange regulations, and it involves transactions worth 27.90 billion rupees ($381.93 million). ED began looking at WazirX’s activities while investigating a money laundering case involving Chinese-owned illegal online gambling applications. The regulator said the Chinese entities laundered proceeds of crime worth 570 million rupees ($7.7 million) via WazirX by converting the funds to cryptocurrencies.

The regulatory agency accused WazirX of not collecting the necessary documents, which is a clear violation of the basic mandatory Anti Money Laundering (AML) and Combating of Financing of Terrorism (CFT) precaution norms and FEMA guidelines.

However, WazirX CEO Nischal Shetty defended the platform against the accusations. He stated that “We go beyond our legal obligations by following Know Your Customer (KYC) and AML processes and have always provided information to law enforcement authorities whenever required. We are able to trace all users on our platform with official identity information. Should we receive a formal communication or notice from the ED, we’ll fully cooperate in the investigation.”

WazirX doesn’t record all transactions

The regulatory agency further accused WazirX of not properly recording transactions on the platform for investigation or audit purposes. ED cited other transactions worth 22.80 billion rupees ($311 million) that weren’t recorded. According to ED, since WazirX doesn’t demand proper documentation from its users, the platform has become a safe haven for people looking to launder money.

This latest development comes at a time when the Indian crypto environment is complicated due to the lack of clear regulations.

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