India’s Financial Watchdog Unfreezes WazirX Accounts After Exchange Cooperates

India’s financial watchdog has unfrozen the bank accounts of one of the country’s largest cryptocurrency exchanges after it cooperated with investigations.

The federal Enforcement Directorate (ED) had been investigating WazirX for violating foreign exchange regulations, during which it froze the exchange’s assets worth 646.70 million rupees ($8.16 million) last month.

Last month, the agency said it had conducted searches on one of the directors of WazirX operator Zanmai Labs.

India’s WazirX cleared after cooperation

The ED had been conducting investigations on 16 fintech companies and Instant loan apps over the past year, some of which “happened to use the WazirX platform,” according to an announcement on the exchange’s webpage. 

While the company emphasized that it had no association with any of the accused entities, it cooperated with investigators by providing “all the necessary details, information, and documents of the alleged accused companies who used the WazirX platform.”

Upon internal investigation, the company acknowledged that many whose information had been sought by the ED had already been marked as suspicious and previously blocked from the platform.

In addition to the “active cooperation” it extended to authorities, WazirX said that the anti-money laundering (AML) measures that led to the blocking of these suspicious accounts, contributed to the unfreezing of the accounts by the ED.

The announcement concluded that WazirX would now be in a “position to continue its banking operations as usual.”

Binance-owned or not?

After Indian authorities had taken action against the exchange as part of an AML probe, Binance CEO Changpeng Zhao denied that Binance had acquired the Indian crypto exchange.

Although the company had announced the acquisition of WazirX in 2019, last month Zhao said that the transaction had never been finalized.

Meanwhile, through the controversy, Nischal Shetty, co-founder of the exchange, continues to insist that WazirX was in fact acquired by Binance in the deal.

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Nicholas Pongratz

Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.

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