ED Probes WazirX In 2 Cases Related To Cryptocurrency

The Directorate of Enforcement is probing two cases related to Crypto-currency against WazirX under the provisions of Foreign Exchange Management Act, 1999 (FEMA).

"In one of the cases, investigation done so far has revealed that one Indian Crypto-exchange platform, Wazirx, operated by Zanmai Labs Private Limited in India was using the walled infrastructure of Cayman Island based exchange BINANCE. Further it has been found that all crypto transactions between these 2 exchanges were not even being recorded on the blockchains and were thus cloaked in mystery", he said.

Accordingly, he said, a Show Cause Notice (SCN) has been issued under the provisions of FEMA against WaxirX for allowing outward remittance of crypto assets worth Rs 2,790 crore to unknown wallets.

Further, in another case, it is noticed that Indian Exchanges namely WazirX has allowed the foreign users' request to convert one crypto into another on its own platform as well as by using transfer from third-party exchanges namely FTX, BINANCE, etc, he said.

"This is with reference to the Rajya Sabha question and the subsequent articles appearing in that context. We would like to inform you that the reference in the headline and body of the article to the term 'money laundering' is inaccurate since the Rajya Sabha Answer under discussion only refers to the Foreign Exchange Management Act (FEMA) and not money laundering. FEMA does not relate to money laundering", said an official statement from WazirX.

"In any case, Zanmai Labs Pvt Ltd has taken legal recourse against the proceedings in question, denies any allegations of wrongdoing, and does not agree with the presentation of facts in the said Answer", WazirX added.