The Directorate of Enforcement (ED) has frozen assets worth over Rs 100 crores of Mumbai-headquartered crypto exchange WazirX. The law enforcement agency also searched director Sameer Mhatre, as reported by ANI. Nischal Shetty, another director of WazirX, is said to be in the UAE. This is in connection to the loan app case, where such companies were found to divert crores of rupees by purchasing cryptocurrencies from WazirX, to avoid ED attachment. This follows an ED notice to the crypto platform under the Foreign Exchange Management Act (FEMA).
The ED said that when the crackdown began, loan app firms “used the cryptocurrency route to take money out of the country.” The agency said that most of the money was transferred to Hong Kong in the form of crypto assets purchased via WazirX. “We found evidence regarding the transfer of money to crypto assets. We have frozen more than Rs 100 crore crypto assets of WazirX.”
Commenting on the searches, the agency said that they are “insignificant” as most of the data is “on the cloud and employees work from home.”
As per Minister of State for Finance Pankaj Chaudhary, the ED is investigating two cases related to crypto-currency against WazirX under the provisions of the FEMA act, he said in a written reply to the Rajya Sabha on Tuesday.
“In one of the cases, investigation done so far has revealed that one Indian crypto-exchange platform, Wazirx, operated by Zanmai Labs Private Limited in India was using the walled infrastructure of Cayman Island-based exchange Binance. Further, it has been found that all crypto transactions between these two exchanges were not even being recorded on the blockchains and were thus cloaked in mystery,” he said in the reply.
Reacting to the Parliament’s reply, WazirX said it has not been served a notice for money laundering.
According to the minister, a Show Cause Notice (SCN) has been issued under the provisions of FEMA against WazirX for allowing outward remittance of crypto assets worth Rs 2,790 crore to unknown wallets.
Further, in another case, it is noticed that Indian exchanges namely WazirX has allowed the foreign users’ request to convert one crypto into another on its own platform as well as by using transfer from third-party exchanges namely FTX, BINANCE, etc, he said.
(With inputs from PTI)