ED raids WazirX for money laundering investigation, freezes bank deposits over Rs. 64.67 crore

The Enforcement Directorate (ED) on Friday said it has frozen bank deposits of Rs. 64.67 crore as part of a money laundering probe against crypto currency exchange WazirX.

The federal agency said it conducted raids against a director of Zanmai Lab Private Limited, which owns WazirX, on August 3 in Hyderabad and alleged he was “non-cooperative”.

The agency’s probe against the crypto exchange is linked to its ongoing investigation against a number of Chinese loan apps (mobile applications) working in India.

The agency had charged WazirX last year for alleged contravention of the Foreign Exchange Management Act (FEMA).

“It was found that Sameer Mhatre, Director WazirX, has complete remote access to the database of WazirX, but 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.” “The lax KYC norms, loose regulatory control of transactions between WazirX and Binance, non-recording of transactions on block chains to save costs and non-recording of the KYC of the opposite wallets has ensured that WazirX is not able to give any account for the missing crypto assets,” the ED alleged in a statement.

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

Therefore, the ED said, equivalent movable assets to the extent of Rs. 64.67 crore lying with WazirX were frozen under the Prevention of Money Laundering Act (PMLA).