New Delhi: Turning up the heat on crypto operators, the Enforcement Directorate (ED) on Friday conducted searches on one of the directors of M/s Zanmai Lab Pvt Ltd which owns the crypto-currency exchange WazirX. The investigative agency has also issued orders to freeze bank balance to the tune of INR 64.67 crore.
The ED is conducting money laundering probe against number of NBFC companies & their fintech partners for predatory lending practices in violation of RBI guidelines.
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
After the criminal investigation began, many of these fintech APPs have shut shop & diverted away the huge profits earned using the above modus operandi. While doing fund trail investigation, ED found that large amount of funds were diverted by the fintech companies to purchase Crypto assets and then launder them abroad.
These companies and the virtual assets are untraceable at the moment. Summons were issued to the Crypto-exchanges. It is seen that maximum amount of funds were diverted to WazirX exchange and the crypto-assets so purchased have been diverted to unknown foreign wallets.
In its probe, the agency found that the company (Zanmai Labs Pvt Ltd) owning WazirX Crypto Exchange created a web of agreements with a couple of foreign entities like Crowdfire Inc. USA, Binance (Cayman Islands), Zettai Pte Ltd Singapore in a bid to obscure the ownership of crypto exchange.
Earlier, WazirX Managing Director Mr Nischal Shetty claimed that the company is an Indian Exchange which controls all the crypto-crypto & inr-crypto transactions and only has an IP & preferential agreement with Binance.
But now, Zanmai claims that they are involved in only inr-crypto transactions. The contradictory & ambiguous answers apparently invited the attention of financial probe agency.
The ED said that that WazirX was given time to reply on the ambiguity but it failed to give details of crypto transactions of suspect fintech APP companies and reveal the KYC of the wallets.