Key Takeaways
- WazirX points out that it noticed that most users whose information was sought by ED were already identified as suspicious by them internally and were blocked in 2020-2021.
- In August, ED froze ₹64.67 crore worth of bank deposits of WazirX as part of an ongoing money laundering probe.
On September 12, crypto trading platform WazirX announced that the Directorate of Enforcement (ED) had unfrozen its bank accounts, allowing the platform to resume banking operations after nearly a month.
“The ED has unfrozen the bank accounts of WazirX. In cooperation with investigators, WazirX provided all necessary details & documents of the alleged accused companies that used the WazirX platform“, WazirX’s tweet reads.
In early August, ED froze ₹64.67 crore worth of bank deposits of WazirX as part of an ongoing money laundering probe against some fraud smartphone-based loan dishing apps “backed by” Chinese funds.
ED had alleged that Sameer Mhatre, Director of WazirX, has complete remote access to the database of WazirX, but despite that, he is also not providing the details of the transactions relating to the crypto assets purchased from the proceeds of crime of the instant loan app fraud.
Making the latest announcement, WazirZ points out that it noticed that majority of the users whose information was sought by ED were already identified as suspicious by WazirX internally and were also blocked in 2020-2021.
The crypto trading platform further clarified that it has no association with any of the alleged accused Fintech/Instant loan app entities which appear to be the subject of ED investigation, and is also carrying out the KYC/AML checks despite having no legal obligation to do so.
ED, which is increasing its crackdown on firms it believed to have violated anti-money laundering laws, had made serious allegations directed at WazirX.
“The lax KYC norms coupled with loose regulatory control of transactions between WazirX and Binance, non-recording of transactions on blockchains to save costs, and the non-recording of the KYC of the opposite wallets have ensured that WazirX is not able to give any account for the missing crypto assets“, ED had said.
In the last few months, ED has stepped up searches and inquiries concerning alleged FEMA and PMLA violations by crypto exchanges in India.
Apart from WazirX, ED had recently conducted searches at the premises of crypto entities Vauld under the Prevention of Money Laundering Act, 2022, and froze their bank balances to the tune of INR 370 Crore.
WazirX, Binance, Coinswitch Kuber, CoinDCX, Vauld, Zebpay, BuyUCoin, Bitbns have all recently been inquired by the ED under FEMA or PMLA.
