India orders freezing of WazirX bank account in money laundering probe

India orders freezing of WazirX bank account in money laundering probe

India's Enforcement Directorate ED has ordered the freeze of a WazirX bank account with Rs 64.67 crore about $8.1 million in connection with a money laundering investigation, IndiaToday reported on August 5.

A number of private financial institutions in India are being investigated over money laundering practices, according to the report.

The initial investigation was about non-banking financial companies NBCFs over predatory lending practices that were in violation of the Reserve Bank of India guidelines.

The agency soon discovered that several companies in the country that were unable to get licenses used the licenses of defunct NBCFs to operate.

The investigations led to the shutting of operations by most of these companies and their profits on buying criptocurrencies.

According to the regulators, most of the funds received by WazirX have now been moved into foreign wallets.

The financial regulators claimed that WazirX provided contradictory and ambiguous information throughout the investigation.

WazirX initially said it controled all Indian rupees to transactions and transactions in criptocurrencies on the exchange. The company later changed its tune to say it was responsible for only the Indian rupees to its transactions while Binance controlled everything else in its attempt to evade regulatory oversight.

The ED said that the directors of WazirX did not cooperate during investigations after several offers by the agency.

The exchange had lax KYC norms, loose regulatory control of transactions between WazirX Binance, non-recording of transactions on the blockchain to save costs and non-recording of KYC of the opposite wallets, and the lack of cooperation led to the search and the discovery of the exchange's lack of cooperation. The exchange had made no efforts to retrieve the assets involved in the investigation, according to the regulator. It was frozen to the extent of Rs 64.67 crore because of these reasons.