WazirX bank assets worth Rs 64.67 crore frozen

WazirX bank assets worth Rs 64.67 crore frozen

WazirX bank assets, worth Rs 64.67 crore, were frozen after the Enforcement Directorate conducted a search on Friday. The searches were done in connection with a case of a platform that assisted instant loan app companies in the laundering of money via purchase and transfer of virtual currency.

The Directorate of Enforcement ED has conducted searches on one of the directors of the M s Zanmai Lab Pvt Ltd, which owns popular Cryptocurrency exchange WazirX, and has issued a freezing order to freeze their Bank balances to the tune of 64.67 crore, the probe agency said in a statement.

A search operation under the PMLA was conducted on August 3 in Hyderabad, against a director of Zanmai Lab Pvt Ltd, which owns WazirX, because of the non-cooperative stand of the Director of WazirX exchange. ED stated that Director WazirX, Director WazirX, has complete remote access to the database of WazirX, but despite the fact that he is not providing the details of transactions relating to the assets purchased from the proceeds of the crime of Instant Loan APP fraud.

A number of Chinese loan apps mobile applications working in India are being investigated by the agency, which is linked to its ongoing investigation of the exchange.

Many of these fintech apps have shut down and diverted the huge profits they earned using the above modus operandi after the criminal investigation began. While doing fund trail investigations, ED found that large amounts of funds were diverted by the fintech companies to purchase assets and then launder them abroad. These companies and the virtual assets are untraceable at the moment. ED has also sent summons to these exchanges. It is seen that a maximum amount of funds was diverted to WazirX exchange and the funds that were purchased have been diverted to unknown foreign wallets.

ED also said that Zanmai Labs Pvt Ltd - the company who owns WazirX, has created a web of agreements with Crowdfire Inc USA, Binance Cayman Islands Zettai Pte Ltd Singapore to obscure the ownership of the exchange. The Managing Director Nischal Shetty stated earlier that WazirX is an Indian exchange that controls all the cripto-crypto and iNR-crypto transactions and only has an IP and preferential agreement with Binance. But now, Zanmai claims they are involved only in INR-crypto transactions, and all the other transactions are done by Binance on WazirX. It stated that they are giving contradictory and ambiguous answers to evade oversight by Indian regulatory agencies.

WazirX works from a Cloud based software AWS Mumbai, all employees work from home, the registered office is a 2 Chair co-working Wework space, and all cripto transactions are controlled by Binance, which is another known office, any known employee, and rarely responds to queries on legal binance.com ED revealed.

Despite giving repeated opportunities, WazirX didn't reveal the KYC of the wallets, despite the fact that they didn't give the transactions of the suspect fintech app companies. Most of the transactions are not recorded on the blockchain. WazirX said prior to July 2020 they did not even record the details of the bank account from which funds were coming into the exchange to purchase criptocurrency, and that there was no physical address verification done. There isn't a check on the source of funds of their clients. There isn't an EDD done. It stated that no STRs were raised.