Indian authorities freeze $8.1M in WazirX funds as part of AML investigation
India’s Directorate of Enforcement, or ED, has announced it froze roughly $8.1 million in funds and conducted a search connected to cryptocurrency exchange WazirX as part of an investigation into instant personal loan fraud.
In a Friday announcement, the Directorate of Enforcement alleged WazirX facilitated transactions by unnamed fintech firms “to purchase crypto assets and then launder them abroad” as part of a scheme involving Chinese-backed companies circumventing India’s licensing regulations. In its investigation, the ED said it ordered WazirX bank accounts containing 646.7 million Indian rupees — roughly $8.1 million at the time of publication — frozen and conducted a search connected to co-founder Sameer Mhatre.
According to the regulator, the investigation was still ongoing. However, the ED claimed the crypto exchange had “lax KYC norms” and “loose regulatory control” of transactions between WazirX and Binance, and did not record information needed to verify from where funds were coming to purchase crypto used in the alleged fraud.
“Despite giving repeated opportunities, WazirX failed to give the crypto transactions of the suspect fintech APP companies and reveal the KYC of the wallets,” said the ED, adding:
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.
In a Friday Twitter thread, Binance CEO Changpeng Zhao said the firm did "not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders." He added that "Binance only provides wallet services for WazirX as a tech solution," while WazirX was
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