The Enforcement Directorate (ED) on Friday said it has frozen cryptocurrency exchange WazirX’s bank assets worth nearly 65 crore as a part of a money laundering probe.
In a statement on Twitter, the law enforcement agency said, “ED searches the Director of WazirX Crypto-Currency Exchange and freezes its Bank assets worth Rs 64.67 Crore for assisting accused Instant Loan APP Companies in laundering of fraud money via purchase & transfer of virtual crypto assets.”
ED searches the Director of WazirX Crypto-Currency Exchange & freezes its Bank assets worth Rs 64.67 Crore for assisting accused Instant Loan APP Companies in laundering of fraud money via purchase & transfer of virtual crypto assets.
— ED (@dir_ed) August 5, 2022
The agency said it conducted searches against a director of Zanmai Lab Pvt Ltd, which owns WazirX, on August 3 in Hyderabad and alleged he was “non-cooperative”, news agency PTI reported.
ED’s probe against the crypto exchange is linked to its ongoing investigation against a number of Chinese loan apps (mobile applications) working in India. The action comes days after the ED served WazirX a notice under the FEMA Act.
“It was found that Sameer Mhatre, Director WazirX, has complete remote access to the database of WazirX, but despite that he is not providing the details of the transactions relating to the crypto assets, purchased from the proceeds of crime of instant loan app fraud. The lax KYC norms, loose regulatory control of transactions between WazirX and Binance, non-recording of transactions on block chains to save costs and non-recording of the KYC of the opposite wallets has ensured that WazirX is not able to give any account for the missing crypto assets,” the ED alleged in a statement.
It also said the company made no efforts to trace these crypto assets.
“By encouraging obscurity and having lax AML (anti-money laundering) norms, it has actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route,” it said.
The ED is investigating two cases related to crypto-currency against WazirX under the provisions of Foreign Exchange Management Act, 1999 (FEMA), Minister of State for Finance Pankaj Chaudhary had said in a written reply to the Rajya Sabha earlier this week.
In the written reply, Chaudhary had said: “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.”
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(With inputs from PTI)