E-Paper
ED freezes WazirX's bank assets worth ₹64.67 crore in money laundering case
In the statement, the ED said, "Because of the non-cooperative stand of the director of WazirX exchange, a search operation was conducted under the Prevention of Money Laundering Act (PMLA) on August 3."
The Enforcement Directorate (ED) on Friday froze assets worth ₹64.67 crore belonging to popular cryptocurrency exchange WazirX while investigating a money laundering case involving the company. According to a statement, the federal agency conducted searches on the premises of one of the directors of Zanmai Lab Pvt Ltd, parent company of WazirX, following which it issued the order.
_1624371649662_1659712389143_1659712389143.jpg "The agency launched its investigation against WazirX last year for suspected violation of foreign exchange regulations.")
In the statement, the ED said, "Because of the non-cooperative stand of the director of WazirX exchange, a search operation was conducted under the Prevention of Money Laundering Act (PMLA) on August 3."
During the search operations, it was found that WazirX's director Sameer Mhatre has complete remote access to the database of the company, yet 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 ED stated, according to news agency ANI.
The agency launched its investigation against WazirX last year for suspected violation of foreign exchange regulations.
In 2021, the ED was looking into a money laundering case which involved Chinese-owned illegal online betting applications. During the course of the investigation it was found that the laundered proceeds of crime worth approximately 570 million rupees had been converted into cryptocurrencies using the Binance platform -- which WazirX owns since 2019.
The ED has been conducting money laundering investigations against a number of Indian non-banking finance companies (NBFCs) and their fintech partners for violation of the Reserve Bank of India (RBI) guidelines on lending.
According to the investigation so far, multiple fintech companies backed by Chinese funds could not get NBFC licence from the RBI for carrying out lending business. So they devised the MoU route with defunct NBFCs to piggyback on their license.
After the criminal investigation began, many of these fintech apps have shut shop and diverted away the huge profits earned using the above modus operandi, the ED said.
"Summons were issued to the Crypto-exchanges. It is seen that a maximum amount of funds were diverted to WazirX exchange and the crypto-assets purchased have been diverted to unknown foreign wallets," the ED said, as per ANI.
The ED said during the investigation it is observed that Zanmai Labs Pvt Ltd - the company owning WazirX Crypto Exchange - has created a web of agreements with Crowdfire Inc USA, Binance, Zettai Pte Ltd Singapore -- to obscure the ownership of the crypto exchange.
(With agency inputs)
