WazirX Under Scrutiny by Indian Agencies For Money Laundering

WazirX Under Scrutiny by Indian Agencies For Money Laundering
  • A Show Cause Notice (SCN) has been issued under the terms of FEMA.
  • ED is probing two instances involving WazirX under the FEMA Act 1999.

State Minister for Finance Pankaj Chaudhary informed Rajya Sabha that ED has given a notice under the FEMA Act to crypto exchange WazirX. In a written response to the Rajya Sabha, he said that the ED is probing two instances involving WazirX under the Foreign Exchange Management Act, 1999 (FEMA).

The Minister made the following statement:

“In one of the cases, investigation done so far has revealed that one Indian Crypto-exchange platform, Wazirx, operated by Zanmai Labs Private Limited in India was using the walled infrastructure of Cayman Island based exchange BINANCE. Further 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.” 

Transfer of Over $350 Million to Unknown Wallets

There was no money laundering notification placed on WazirX after the Parliament’s response. A Show Cause Notice (SCN) has been issued under the terms of FEMA against WazirX for permitting crypto assets worth more than $350 million USD to be transferred to unknown wallets, according to the minister. Binance acquired WazirX in 2019.

WazirX, an Indian exchange, has permitted overseas customers’ requests to convert one crypto into another on its platform as well as through third-party exchanges like as FTX, BINANCE, etc., he said.

This was in answer to a query from Rajya Sabha member Sushil Kumar Modi regarding if certain crypto exchanges permitted residents from countries like the United States, Germany, and Brazil to trade without KYC, and AML compliance. Also whether the money received by these crypto exchanges from global capital ventures for which declaration has not been made. And whether the Indian crypto platform utilized the wallet infrastructure of foreign exchange without any consent.

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An engineering graduate who is passionate about writing and loves the very existence of crypto. Trading forex currency keeps me busy when I am not writing and analysing the crypto world.