India’s Enforcement Directorate (ED) has reportedly sent a notice to Wazirx, one of India’s largest cryptocurrency exchanges, under the Foreign Exchange Management Act, 1999, (FEMA). The ED elaborated, “The investigation was initiated on the basis of ongoing money-laundering investigation into illegal online betting applications owned by China.”
ED’s FEMA probe of Wazirx
India’s Enforcement Directorate (ED) on Friday reportedly said that it has issued show cause notices (SCN) to Wazirx, CEO Nischal Shetty and co-founder Sameer Hanuman Mhatre. Wazirx is one of the largest crypto exchanges in the country. ED is India’s law enforcement and economic intelligence agency.
The notice was issued under the “Foreign Exchange Management Act, 1999, (FEMA) for transactions involving crypto-currencies worth Rs 2,790.74 crore. [$381.93 million], ED wrote, adding:
The ED initiated the FEMA probe on the basis of an ongoing money laundering probe into illegal online betting applications owned by the Chinese.
The ED said that its investigation revealed that the accused Chinese nationals had laundered the proceeds of crime of about Rs 57 crore by converting INR deposits into Tether.USDT) and transfer them to Binance.
The authority claims that during the period under investigation, users of Wazirx received INR 880 crores of cryptocurrency from Binance accounts and transferred INR 1,400 crores of coins to Binance accounts.
The ED noted that “none of these transactions are available on the blockchain for any audit/investigation,” emphasizing:
Wazirx clients can transfer ‘valuable’ crypto-currencies to any person without any proper documentation of their location and nationality, making it a safe haven for users looking for money laundering/other illegal activities. goes.
The ED alleges that “Wazirx does not collect the required documents in clear violation of basic mandatory Anti Money Laundering (AML) and Financing of Terrorism (CFT) precautionary norms and FEMA guidelines.”
Following media reports of the ED notice, Wazirx CEO Shetty tweeted that his exchange is “in compliance with all applicable laws.”
“We go beyond our legal obligations by following Know Your Customer (KYC) and Anti Money Laundering (AML) procedures and always provide information to law enforcement authorities as and when required,” he stressed. From:
We are able to trace all users on our platform with official identifying information. If we get a formal communication or notice from ED, we will fully cooperate in the investigation.
Wazirx said early Friday that it had not received any notice from the ED, but insisted to its users, “Your funds are absolutely safe on Wazirx.”
What do you think about this ED investigation by Wazirx? Let us know in the comments section below.
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