India’s federal financial crime regulator, the Directorate of Enforcement (ED), is reportedly investigating WazirX, the Indian subsidiary of leading cryptocurrency exchange Binance, for transactions violating foreign exchange regulations in the country.
According to a Friday report, the ED is probing WazirX for questionable transactions worth 27. 90 Billion rupees (($381.93 million) that may have violated the agency’s FX rules.
WazirX, one of the largest crypto trading companies in India, was acquired by Binance in 2019. Following the acquisition, WazirX raised $2 million via an initial exchange offering conducted on Binance Launchpad.
The WazirX investigation was reportedly instigated by a money laundering case involving a Chinese illegal betting platform.
“WazirX does not collect the requisite documents in clear violation of the basic mandatory Anti Money Laundering (AML) and Combating of Financing of Terrorism (CFT) precaution norms and FEMA guidelines,” the ED said.
The regulator noted that it discovered that laundered earnings worth 570 million rupees were converted into cryptocurrencies on WazirX.
The financial regulator also lamented that several other transactions worth 22.80 billion rupees were visible on the blockchain network for proper auditing and users of Wazir could successfully send out funds without adequate verification, making it sustainable for money laundering.
Following news of the ongoing probe, WazirX noted that although it has not yet received a formal notification from the regulator, it is in support of all the relevant laws.
Nischal Shetty, CEO and Founder of WazirX promised that his company will comply with the law enforcement agency by providing necessary information that may be required during the investigation.
“We go beyond our legal obligations by following Know Your Customer (KYC) and AML processes and have always provided information to law enforcement authorities whenever required,” said Shetty.