A Cryptocurrency Exchange from India Undergoes AML Investigation

According to the latest reports, one of the well-known cryptocurrency exchanges in India is being investigated by the country regulators. The reports confirm that the name of the Indian exchange is WazirX. The exchange was reportedly acquired by Binance back in 2019.

The local media sources have revealed that the exchange is currently being investigated for the violation of the regulatory guidelines. The exchange has been alleged by the regulators violating the Foreign Exchange Act (FEMA) of India.

The sources have revealed that a probe has already been launched to carry out an investigation on the exchange. The probe will ensure that it carries out a detailed investigation of the exchange in terms of regulatory compliance.

The Enforcement Directorate (ED) of India has confirmed the reports of the probe through Twitter on Friday, June 11, 2021.

The Enforcement Directorate (ED) has revealed that it is currently investigating a large number of transactions summing up to a huge total. The regulator has confirmed that it is currently investigating $389 million worth of transactions reported by WazirX.

The local media sources have confirmed that the Enforcement Directorate (ED) has even issued show cause notices. The show cause notices have been issued under the names of the executives at WazirX, as well as the directors.

The reports have confirmed that the directors that have show cause notices sent to them are Hanuman Mhatre and Nischal Shetty.

The regulator has revealed that its law enforcement agents were the ones who raised the alarms about the exchange. The agents at the regulatory were performing an investigation on transactions they suspected were involved in money laundering.

However, they were not targeted WazirX initially, as they were carrying out an investigation on some betting applications involved in money laundering transactions. The regulator revealed that they were also investigating the profiles of some of the Chinese nationals involved in the matter.

The regulator has revealed that the individuals it had under investigation had reportedly laundered $7.8 million worth of money outside the country. The regulator revealed that the money launderers had converted the local Indian rupee into USDT and then proceeded with the transactions.

The regulator revealed that the individuals had been receiving instructions from abroad. The regulator has claimed that it was in the instructions for the suspects that they need to transfer the USDT to wallets for Binance.

The regulator has also claimed that from their investigation they have established that many transactions were made to WazirX exchange by such users. They kept transacting millions of dollars to their WazirX accounts from Binance. The most concerning situation are that when investigated, none of these transactions were found in the blockchain. Therefore, WazirX is being held liable for failing to collect the information for vetting the clients and their transactions. Based on the liability, WazirX is in violation of CFT, AML, and FEMA laws.