India’s Enforcement Directorate (ED) reportedly sent a notice to Wazirx, one of the largest cryptocurrency exchanges in India, under the Foreign Exchange Management Act 1999 (FEMA). The investigation was opened “on the basis of the ongoing money laundering investigation into illegal online betting applications owned by Chinese,” detailed the ED.
ED’s FEMA survey on Wazirx
India’s Directorate of Enforcement (ED) reportedly said on Friday it had issued a Reasonable Notice (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 cryptocurrencies valued at Rs 2,790.74 crore [$381.93 million]The ED wrote, adding:
ED has opened a FEMA investigation based on the ongoing money laundering investigation into illegal Chinese-owned online betting apps.
The ED explained that its investigation found that the accused Chinese nationals laundered proceeds of crime worth around Rs.57 crore by converting INR deposits into tether (USDT) and transfer them to Binance.
Authority claims that during the investigation period, Wazirx users received cryptocurrency worth INR 880 crore from Binance accounts and transferred coins worth INR 1,400 crore on Binance accounts.
The ED noted that “None of these transactions are available on the blockchain for any audit / investigation,” pointing out:
Wazirx clients could transfer ‘valuable’ cryptocurrencies to anyone, regardless of location and nationality, without any proper documentation, making it a safe haven for users looking for money laundering. / other illegitimate activities.
The ED alleges that “Wazirx is failing to collect required documents in flagrant violation of Basic Mandatory Anti-Money Laundering (AML) and Anti-Terrorist Financing (CFT) Precautionary Standards and FEMA Guidelines.” .
Following media reports of the ED notice, Wazirx CEO Shetty tweeted insisting that his exchange “complies with all applicable laws.”
He insisted, “We go beyond our legal obligations by following the Know Your Customer (KYC) and Anti-Money Laundering (AML) processes and have always provided information to the authorities responsible for the enforcement whenever necessary ”, specifying:
We are able to track all users on our platform with official credentials. If we receive a formal communication or notice from the emergency service, we will fully cooperate with the investigation.
Wazirx said early Friday morning that it had not received notice from ED but stressed to its users: “Your funds are absolutely safe on Wazirx.”
What do you think of this Wazirx ED survey? Let us know in the comments section below.
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