Enforcement Directorate (ED) on Friday issued show-cause notice to WazirX and its directors Nischal Shetty and Sameer Mhatre under the Foreign Exchange Management Act (FEMA), 1999 for transactions involving cryptocurrencies worth Rs 2790.74 crore.
WazirX is an Indian crypto exchange that acts as a platform for trading various digital currencies.
ED initiated the FEMA investigation on the basis of an ongoing money laundering probe into Chinese-owned ‘illegal’ online betting applications.
“During the course of the investigation, it was seen that the accused Chinese nationals had laundered proceeds of crime worth Rs 57 crore approximately by converting the INR deposists into cryptocurrency Tether (USDT) and then transferring the same to Binance based on instructions recived from abroad,” the agency further said.
In the period under investigation, ED said users of WazirX via its pool account have received incoming cryptocurrency worth Rs 880 crore from Binance accounts and transferred out cyrptocurrency worth Rs 1,400 crore to Binance accounts.
“None of these transactions are avaialble on the blockchain for any investigation.”
“It was found that the WazirX clients could transfer ‘valuable’ cryptocurrencies to any person irrespective of its location and nationality without any proper documentation whatsoever, making it a safe haven for users looking for money laundering or other illegitimate activities,” ED said.
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