India Freezes Assets of Binance-Owned Local unit WazirX

Key Takeaways:

  • Assets belonging to WazirX, which Binance acquired in 2019, have been frozen as part of an investigation into potential breaches of foreign exchange regulations.
  • Assets worth $8.16 million, or 646.70 million rupees, were declared blocked by the ED.

One of the world’s largest digital currency exchanges, Binance, owns WazirX, which has had its assets frozen by India’s financial crime-fighting agency as a result of an investigation into possible violations of foreign exchange laws.

Regarding alleged misconduct on immediate loan apps, which provide short-term loans, the Indian agency is looking into a number of fintech companies.

In a press release, the ED claimed that WazirX assertively aided approximately 16 suspect fintech companies in laundering “the proceeds of crime using the crypto route.” The result is that the authority has frozen $8.1 million in WazirX funds.The ED has accused the platform of allegedly laundering 350 million dollars from instant loan companies obtained illegally.

According to Reuters, WazirX has not yet released a statement in rebuttal to the Federal Enforcement Directorate’s asset seizure. 

One of the directors of Zanmai Lab, the company that owns WazirX, was the target of the searches. Following the news publication, Binance CEO Changpeng ‘CZ’ Zhao refuted claims that his company is the owner of WazirX on Twitter.

While conducting a fund trail investigation, ED discovered that substantial quantities of funds were transferred by fintech companies to buy crypto assets and then launder them abroad…(a) the majority of funds were diverted to WazirX exchange, and the crypto assets so purchases were diverted to unknown foreign wallets,” the release stated.

Binance’s decision to completely disassociate itself from the situation demonstrates its desire to appear innocuous.  Users should be aware that Binance only offers wallet services for WazirX as a technological solution, as @cz binance notifies users. Off-chain transactions are also integrated to reduce network fees.

This can prove that WazirX is in charge of all other exchange operations, including user registration, KYC, trading, and initiating withdrawals.

Around two months ago, Binance was the target of a case comparable to WazirX’s and alleged “indirect” money laundering, but it involved 2.35 billion USD from 2017 to 2021.

According to the CEO of Binance, recent claims regarding the management of the platform by Zanmai Labs and the operation of WazirX are deeply concerning.

“Worldwide, Binance works with law enforcement organizations. Any opportunity to collaborate with ED would make us happy.”

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