The Enforcement Directorate(ED) of India freezes bank assets worth Rs 64.67 crore of WazirX under the Prevention of Money Laundering Act (PMLA).
The ED is also investigating several Indian NBFCs and their fintech partners for money laundering.
On August 2, the finance ministry informed the Rajya Sabha that the ED was Probing WazirX for money laundering of Rs 2,790 Crore under the Foreign Exchange Management Act of 1999. (FEMA).
The maximum amount of funds were diverted to the WazirX exchange, and the crypto assets purchased were diverted to foreign wallets, according to the enforcement agency.
ED also discovered that Zanmai Labs, the owner of WazirX, has established a web of agreements with a variety of entities, including Crowdfire founded by Nischal Shetty, Cayman Island-registered Binance, and a Singapore-based entity called Zettai to obscure the ownership of the crypto exchange.
Due to the refusal of WazirX’s director to cooperate, a search operation was conducted on August 3 under PML. It was discovered that Sameer Mhatre, a director of WazirX, has complete remote access to the WazirX database, yet refuses to provide the details of the transactions relating to the crypto assets purchased from the proceeds of the Instant Loan APP fraud.
According to the ED, “..the lax KYC norms, loose regulatory control of transactions between WazirX and Binance, non-recording of transactions on blockchains to save costs and non recording of the KYC of the opposite wallets has ensured that WazirX is not able to give any account for the missing crypto assets. It has made no efforts to trace these crypto assets.”
