Image: Reuters Berita 24 English - India's agency for fighting financial crime said on Friday that it had frozen the assets of WazirX, w...
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| Image: Reuters |
Berita 24 English - India's agency for fighting financial crime said on Friday that it had frozen the assets of WazirX, which is connected to Binance, the largest digital currency exchange in the world. This was done as part of an investigation into whether foreign exchange rules were broken.
The federal Enforcement Directorate (ED) said that it had frozen assets worth 646.70 million rupees ($8.16 million).
A spokesperson for WazirX, one of the biggest virtual currency exchanges in India, said, "We have been fully cooperating with the Enforcement Directorate for several days and have answered all of their questions in a clear and honest way."
"We disagree with what the ED says in its press release. We are thinking about what we should do next."
The agency said that its move was related to an investigation into whether or not the crypto exchange helped companies that make instant loan apps launder money from criminal activity by letting them turn it into cryptocurrencies on its platform.
One of the directors of Zanmai Lab, the company that owns WazirX, was searched.
The ED said that it was looking into several shadow banks and their fintech companies for money laundering because they broke central bank rules and used predatory lending practises.
"While doing fund trail investigations, ED found that large amounts of funds were diverted by fintech companies to buy crypto assets and then launder them abroad... the maximum amount of funds were diverted to WazirX exchange and the crypto assets, so purchases have been diverted to unknown foreign wallets," it said in a release.
The investigating agency also said that a lot of these fintech companies that did illegal lending were backed by money from China.
The ED started looking into WazirX last year because it was thought to have broken rules about foreign exchange.
The CEO of Binance, Changpeng Zhao, said on Twitter on Friday that the company does not own any Zanmai Labs shares.
(https://bit.ly/3bt0Sw5)
"In a blog post on November 21, 2019, Binance said that it had "bought" WazirX. This exchange was never finished. Binance has never owned any shares of Zanmai Labs at any time "Zhao sent a tweet.
He said that Binance only gives WazirX wallet services as a technical fix.
In 2021, the ED was looking into a case of money laundering that involved illegal online betting apps that were owned by Chinese people. During the investigation, it was found that about 570 million rupees in dirty money had been turned into cryptocurrencies using the Binance platform, according to the ED.
($1 = 79.2040 Indian rupees)
