BENGALURU: The Enforcement Directorate (ED) has served a showcause notice to the directors of
India’s largest cryptocurrency exchange, Wazir X Nischal Shetty and Sameer Mhatre on Friday for contravention of FEMA (Foreign Exchange Management Act), 1999 involving cryptocurrency transactions worth Rs 2,790.74 crore.
The investigation agency said that it has initiated the probe on the basis of the ongoing money laundering investigation into Chinese-owned illegal online betting applications.
“During the course of the investigation, it was seen that the accused Chinese nationals had laundered proceeds of crime worth Rs 57 crore by converting the INR deposits into cryptocurrency Tether (USDT) and then transferring the same to the Cayman Island-based bitcoin exchange Binance on instructions received from abroad,” the ED said in the statement on Friday.
WazirX CEO Nischal Shetty, however, said that the company is yet to receive any notice from the investigating agency.
“WazirX is in compliance with all applicable laws. We go beyond our legal obligations by following Know Your Customer and Anti Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required. Should we receive a formal communication or notice from the ED, we will fully cooperate in the investigation.” he said, adding the funds are safe at WazirX and their is no need to worry.
Global cryptocurrency exchange Binance had acquired WazirX in 2019 which enabled Wazir X users to
directly purchase digital asset Tether on binance.com using Indian currency.
Siddharth Menon, chief operating officer, WazirX, said that both Binance and WazirX accounts are operated by the same owner and are linked by the same email and there are no third-party transfers, unlike blockchain transfers.
He added that KYC details are mandatory for any withdrawals from the accounts. WazirX, ED alleged, does not collect the requisite documents in clear violation of the basic mandatory AML and combating financing of terrorism norms and FEMA guidelines.