WazirX directors Nischal & Sameer in soup over crypto transactions worth Rs 2,790.74 crore… details here

In the period under investigation, users of WazirX via its pool account, have allegedly received incoming cryptocurrency worth Rs 880 crore from Binance accounts and transferred out cryptocurrency worth Rs 1,400 crore to Binance accounts.

Avatar Written by June 11, 2021 14:03
WazirX

New Delhi: WazirX (M/s Zanmai Labs Pvt Ltd) and its directors Nischal Shetty and Sameer Hanuman Mhatre have been issued showcause notice by the Enforcement Directorate (ED) under FEMA for transactions involving cryptocurrencies worth Rs 2,790.74 crore.

The development assumes significance because of recent buzz over cryptocurrencies trading, lack of regulated market in India and also associated volatility with the digital currencies trade.

WaziX is the platform for crypto trade in India

WazirX is an India-based cryptocurrency exchange which allows customers to trade in digital currencies such as Bitcoin, Ethereum, Ripple etc.

WazirX allows vide range of transactions with cryptocurrencies (CCs) including exchange of CCs with rupee and vice-versa, exchange of CCs, person to person (P2P) transactions, and even transfer/receipt of cryptocurrency held in its pool accounts to wallets of other exchanges which could be held by foreigners in locations outside India.

WazirX

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What’s under probe, why WazirX under ED scanner

A probe has been launched on basis of ongoing money-laundering investigation into Chinese-owned illegal online betting applications.

In the period under investigation, users of WazirX via its pool account, have received incoming cryptocurrency worth Rs 880 crore from Binance accounts and transferred out cryptocurrency worth Rs 1,400 crore to Binance accounts, reported a leading news portal.

Here is what ED said in statement:

# Chinese nationals had laundered proceeds of crime worth Rs 57 Crore approximately by converting the INR deposits into Crypto-currency Tether (USDT) and then transferring the same to Binance (exchange registered in Cayman Islands) Wallets based on instructions received from abroad.

# In the period under investigation, users of WazirX via its pool account, received incoming cryptocurrency worth Rs 880 crore from Binance accounts and transferred out digital currencies worth Rs 1,400 crore to Binance accounts. None of these transactions are available on the blockchain for any audit/investigation

# It was found that the WazirX clients could transfer ‘valuable’ cryptocurrencies to any person irrespective of its location and nationality without any proper documentation whatsoever, making it a safe haven for users looking for money laundering/other illegitimate activities.

# WazirX does not collect requisite documents in clear violation of the basic mandatory Anti Money Laundering (AML) and Combating of Financing of Terrorism (CFT) precaution norms and FEMA guidelines.

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