India’s financial crime fighting agency is investigating more than 10 cryptocurrency exchanges in the country for allegedly laundering more than 10 billion rupees (US$125 million), The Economic Times reported, citing unnamed sources.
The report comes days after the Enforcement Directorate (ED) froze US$8 million in assets belonging to homegrown crypto exchange WazirX, one of the country’s largest by volume, for “assisting accused instant loan app companies.”
The Economic Times quoted an official as saying that similar transactions had happened on other exchanges. WazirX has actively assisted about 16 fintech companies under investigation for alleged money laundering using cryptocurrencies, it reported.
Multiple calls to the directorate from Forkast have gone unanswered.
In response to a request for comment from Forkast, WazirX reiterated a statement it had issued on Aug. 9 stating that WazirX was a platform “co-operated by” Zanmai Labs and Binance.
“Zanmai Labs has a no-tolerance policy towards any illegal activities using WazirX,” it said. “Users agree in the User Agreement to use WazirX in accordance with applicable law. Users are signed up on WazirX only after they complete the KYC process, including submitting proof of address and identity.”
KYC refers to know-your-client guidelines requiring financial firms to verify the identity of their clients.
Due to nervousness over the future of WazirX, some of its users have moved their assets to Binance in order to protect their investments, they told Forkast.
According to The Economic Times, the directorate was closely monitoring a row between WazirX CEO Nischal Shetty and Binance CEO Changpeng Zhao on social media over the ownership of the Indian exchange. The public exchanges between the two men began after the announcement of the freezing of WazirX assets.
Zhao, in a series of Tweets, said that on Nov. 21, 2019, Binance published a blog post saying that it had acquired WazirX. But the transaction was never completed, he wrote, adding that Binance had never owned any shares of Zanmai Labs, the entity operating WazirX.
Shetty refuted this claim, saying in an interview that he had legal documents to prove that Binance controlled all crypto-to-crypto trading as well as crypto deposits and withdrawals on the platform. He added that WazirX, a product and a brand owned by Binance, was acquired in 2019 and has a license from Binance for processing rupee transactions.