Officials with knowledge of the matter said that the Enforcement Directorate (ED) has seized a cryptocurrency, ED has frozen the bank accounts of another unnamed crypto exchange platform, which has a total cryptocurrency worth of Rs 370 crore.
People told ET on the condition of anonymity that its investigation has revealed that the accused companies are approaching exchanges to buy crypto coins worth over Rs 100 crore and sending the coins to international wallets. He added that the exchanges did not conduct any increased investigation and even failed to report suspicious transactions.
However, WazirX said this week that it is KYC compliant. A spokesperson said it does not have a policy of tolerance towards any illegal activities. A person with knowledge of the matter said that the accused app-based loan companies allegedly used fintech to receive and make payments. The person said that accumulated profits and balances were remitted out of the country using crypto, adding another layer to the funds. “It becomes difficult to trace these proceeds of crime, as the exchange may facilitate KYC, but there is no information about crypto-to-crypto transfers made by the accused,” the official said.
India’s leading crypto exchange platform WazirX is in hot water with the ED for allegedly helping 16 accused loan app operators, mostly backed by Chinese funds, move victims’ blood money out of India and into undisclosed foreign accounts. rob. According to the ED, the accused instant loan app companies laundered blood money through purchase and transfer of virtual crypto assets.
In connection with the case, the ED conducted raids on Sameer Mhatre, director of Janmay Lab, who owns the crypto exchange. Thereafter, they attached Rs 64.67 crore of WazirX and their assets were sealed. Reports also state that the ED has frozen the bank accounts of another unnamed crypto exchange platform, which has a total cryptocurrency worth of Rs 370 crore. Following the ED’s heat on WazirX, an embarrassing brawl broke out on Twitter between its CEO Nischal Shetty and US-based Binance CEO Changpeng Zhao (CZ).
Whereas Binance is the largest crypto exchange platform in the world. In 2019, a blog post by Binance revealed that the firm had acquired WazirX for an undisclosed amount.
On the other hand, WazirX CEO Nischal Shetty hit back saying that Binance owns WazirX and is concerned with its operations, trading and trading practices.
But Binance says that no, it has no access to WazirX’s data, customer information, transactions or servers.
Shetty says that Binance has root (full) access to the WazirX servers and holds the crypto assets.
With regard to the Binance blog post on the acquisition, CZ clarified that the acquisition was never completed.
How did WazirX allegedly help the accused loan app companies? The allegation against WazirX is that it failed to perform proper KYC on its customers, causing the accused loan app companies to flee without investigation.
KYC means Know Your Customer and by this WazirX is supposed to know the bank account details and other information of each customer. But the ED says that WazirX may not even have any information about all of its customers and that their transactions are not even recorded on the blockchain.
The Binance and WazirX dispute, ED investigation and allegations have robbed crypto investors and customers in India of their faith in the already checked reputation of the cryptocurrency world.
According to officials, thousands of these instant loan application companies are under the scanner of various investigative agencies including the ED, Income Tax Department, Ministry of Corporate Affairs and the police. A senior government official said, “In at least 50% of these cases, the directive has changed from Indians to Chinese nationals or they have received money from their Chinese parents.” “In the entire Loan App case, crypto exchanges were the second point of failure. Money came into bank accounts first. From banks, it flowed into crypto exchanges, so it was not caught at the banking level,” said an industry executive. Secret to Evolution.