Hyderabad's WazirX under ED scanner in Rs 2,790-cr money laundering case

HYDERABAD: The Enforcement Directorate (ED) has been carrying out intensive searches at the residence of the director of WazirX, a crypto currency trading firm, as part of investigation into an alleged money-laundering case worth Rs 2,790 crore.

This was revealed by the Centre when Minister of State (MoS) for Finance Pankaj Chaudhary informed Rajya Sabha that ED had served a notice to WazirX under the Foreign Exchange Management Act (FEMA) on August 2. He also added that the federal agency was looking into two cases related to crypto-currency against WazirX.

"In one of the cases, investigations revealed that WazirX operated by Zanmai Labs Private Limited in India was using the walled infrastructure of Cayman Island-based exchange BINANCE," stated Choudary in his written reply in Rajya Sabha. The Minister of State added that the exchanges between these two companies were not recorded on blockchains and were thus cloaked in mystery.

Responding to the statement of the minister in Parliament, WaxirX said that they did not receive any notice regarding money laundering. Pankaj Chaudary, in his statement, had said that WazirX had been issued a Show Cause Notice (SCN) under the FEMA Act, 1999, for authorizing the transfer of cryptocurrency assets worth Rs 2,790 crore to unknown wallets. It further came to light that Indian exchange companies like WazirX had also granted requests to customers overseas to convert one cryptocurrency into another on their own platform besides utilizing transfers from other exchange companies like FTX, BINANCE.

WazirX company deals with Cryptocurrency Exchange and indulges in buying, selling and trading Bitcoin, Ethereum, Ripple, Litecoin and more. Users can buy cryptocurrencies by depositing money into these exchange companies. Binance has acquired WazirX in November 2019.