Operations As Usual, Says Crypto Exchange WazirX After Raid By Indian Regulators

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After Raids By Regulators, Crypto Exchange WazirX Says Operations As Usual

Oper­a­tions being run as usu­al, says cryp­tocur­ren­cy exchange WazirX

After the Direc­torate of Enforce­ment (ED) raid­ed one of its direc­tors and froze bank bal­ances to the tune of Rs 64.67 crore, cryp­tocur­ren­cy exchange WazirX reit­er­at­ed that the com­pa­ny’s oper­a­tions are being con­duct­ed as usu­al, and cryp­to and rupee with­drawals are being processed normally.

“In light of recent news about WazirX, we want­ed to assure you that oper­a­tions are being con­duct­ed as usu­al,” the cryp­to exchange tweet­ed on Sun­day evening.

On Sat­ur­day, the cryp­to exchange said it was “ful­ly coop­er­at­ing” with the ED for “sev­er­al days and have respond­ed to all their queries ful­ly and transparently.”

Fur­ther, it said the com­pa­ny did not agree with the alle­ga­tions slapped by the ED, and it was eval­u­at­ing a “fur­ther plan of action”.

The enforce­ment agency on Fri­day said it con­duct­ed search­es on one of the direc­tors of Zan­mai Lab Pvt Ltd, which owns WazirX, and has issued the freez­ing order of their Bank balances.

Because of the non-coop­er­a­tive stand of the Direc­tor of the WazirX exchange, a search oper­a­tion was con­duct­ed under the Pre­ven­tion of Mon­ey Laun­der­ing Act (PMLA) on 3rd August 2022.

It was found that Sameer Mha­tre, Direc­tor of WazirX, has com­plete remote access to the data­base of WazirX. Still, despite that, he is not pro­vid­ing the details of the trans­ac­tions relat­ing to the cryp­to assets pur­chased from the pro­ceeds of crime of Instant Loan APP fraud, ED had said.

The lax KYC norms, loose reg­u­la­to­ry con­trol of trans­ac­tions between WazirX & Binance, non-record­ing of trans­ac­tions on Blockchains to save costs, and non-record­ing of the KYC of the oppo­site wal­lets have ensured that WazirX is not able to give any account for the miss­ing cryp­to assets.

It has made no efforts to trace these cryp­to assets. By encour­ag­ing obscu­ri­ty and hav­ing lax AML norms, it has active­ly assist­ed around 16 accused fin­tech com­pa­nies in laun­der­ing the pro­ceeds of crime using the cryp­to route. 

There­fore, the enforce­ment agency said that equiv­a­lent mov­able assets to Rs 64.67 crore lying with WazirX were frozen under PMLA, 2002.

Impor­tant­ly, the enforce­ment agency has been con­duct­ing a Mon­ey Laun­der­ing inves­ti­ga­tion against sev­er­al Indi­an non-bank­ing finance com­pa­nies (NBFCs) and their fin­tech part­ners for preda­to­ry lend­ing prac­tices in vio­la­tion of the RBI guide­lines and by using tele-callers who mis­use per­son­al data and use abu­sive lan­guage to extort high-inter­est rates from the loan takers.

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