The Enforcement Directorate (ED) today announces that it has issued a show-cause notice to cryptocurrency exchange WazirX. This notice is issued for contravention of FEMA (Foreign Exchange Management Act), 1999.
As per the official tweet from the Enforcement Directorate, “ED has issued Show Cause Notice to WazirX Crypto-currency Exchange for contravention of FEMA, 1999 for transactions involving crypto-currencies worth Rs. 2790.74 Crore.”
FEMA investigation against WazirX started due to the ongoing money-laundering investigation into Chinese owned illegal online betting Applications.
However, Nischal Shetty, the Founder and CEO of WazirX tweets, “WazirX is yet to receive any show-cause notice from the Enforcement Directorate as mentioned in today’s media reports. WazirX is in compliance with all applicable laws.”
According to him, the WazirX is able to trace all users on their platform with official identity information. Also, he said, “Should we receive a formal communication or notice from the ED, we’ll fully cooperate in the investigation.”
Nischal also says, “We go beyond our legal obligations by following Know Your Customer (KYC) and Anti Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required.”
”During the course of the investigation, it was seen that the accused Chinese nationals had laundered proceeds of crime worth ₹57 Crore approximately by converting the INR deposits into Crypto-currency Tether (USDT) and then transferring the same to Binance (exchange registered in Cayman Islands) Wallets based on instructions received from abroad,” ED said in the statement.
“In the period under investigation, users of WazirX via its pool account, have received incoming cryptocurrency worth ₹880 crore from Binance accounts and transferred out cryptocurrency worth ₹1,400 crore to Binance accounts. None of these transactions are available on the blockchain for any audit or investigation,” it claimed.
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