Enforcement Directorate freezes crypto exchange WazirX’s bank balance after search: Report

Notably, the agency’s investigation into the crypto exchange is reportedly linked to its ongoing investigation into a number of Chinese lending apps (mobile applications) operating in India.

The ED is investigating two cases related to cryptocurrency against WazirX under the provisions of the Foreign Exchange Management Act, 1999 (FEMA), he said in a written reply to the Rajya Sabha, according to the news agency PTI report.

In a written response, he said, “in one of the cases, investigations so far have revealed that an Indian cryptocurrency exchange platform, Wazirx, operated by Zanmai Labs Private Limited in India, was using the ring-fenced infrastructure of the Cayman Island-based exchange BINANCE. Furthermore, it has found that all crypto transactions between these two exchanges were not even recorded on the blockchains and were thus shrouded in mystery.”

In response to Parliament’s reply, WazirX had informed that no money laundering notice has been served. According to the minister, a Show Cause Notice (SCN) has been issued under the provisions of FEMA against WazirX for allowing outbound transfer of crypto assets worth ₹2,790 crore to unknown wallets, the PTI said the report.

Meanwhile, noting another case, the minister said it was noticed that Indian exchanges namely WazirX have allowed foreign users’ request to convert one crypto to another on their own platform as well as by using transfer from third-party exchanges, namely FTX, BINANCE, etc., the report states.

(With inputs from ANI, PTI)

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