India’s financial crime-fighting agent said Friday that it had frozen WazirX’s assets, which were owned by Binance, the largest digital currency exchange in the world, as part its investigation into possible violations of foreign exchange regulations.
According to the federal Enforcement Directorate (ED), assets were frozen at 646.70 crore rupees ($8.16million).
WazirX didn’t immediately respond to my request for comment.
According to the agency, its actions were related to an investigation into the role of the crypto exchange in aiding instant loan apps companies in laundering proceeds from crime through the conversion of it into cryptocurrency on its platform.
These searches were done on Zanmai Lab’s director, WazirX. WazirX is one of the most popular virtual currency exchanges in Pakistan.
According to the ED, it is investigating money laundering against a number of shadow banks as well as their fintech companies in relation to violations of central bank norms.
“While conducting fund trail investigations, ED discovered that large amounts were diverted by fintech companies to buy crypto assets and then to launder them abroad …(a). The maximum amount of funds was diverted to WazirX and the crypto assets purchased were also diverted to
It stated in a release that unknown foreign wallets were being used.
The investigating agency found that many of these companies involved in illegal lending practices were supported by Chinese funds.
Last year, the ED began an investigation into WazirX, owned by Binance since 2019, for possible violations of foreign exchange regulations.
ED was investigating a money laundering case in 2021 that involved illegal online gambling applications owned by Chinese. The investigation revealed that approximately 570 million rupees of laundered proceeds from crime had been converted to cryptocurrencies via the Binance platform.
India has imposed tax regulations on virtual currencies, which have caused trading volumes to plummet and dealt a severe blow.