ED freezes WazirX's bank assets worth Rs 65Cr

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

In its official Twitter account, ED disclosed that it had conducted searches at the premises of one of the directors of Zanmai Labs Private Limited, which operates WazirX.

It is alleged that the company was laundering fraudulent money via the purchase and transfer of virtual crypto assets.

On August 3, the Ministry of Finance informed the Rajya Sabha that the ED is investigating two cases against WazirX under the provisions of the Foreign Exchange Management Act, 1999 (FEMA). It had further said that Zanmai Labs was using the walled infrastructure of Binance.

The ministry further stated that "all crypto transactions between WazirX and Binance were not being recorded on the blockchain and were cloaked in mystery."

It stated that WazirX allowed the foreign users’ request to convert one crypto into another by using transfers from third-party exchanges including FTX, Binance and others.

In accordance with FEMA regulations, a show-cause notice had been issued to WaxirX for allowing outward remittance of crypto assets worth Rs 2,790 crore to unknown wallets, media had earlier reported. In June 2021, ED summoned the firm to explain transactions involving cryptocurrencies.

On July 6, crypto exchanges including CoinDCX, CoinSwitch Kuber, and Unocoin were served notices by the ED as a part of its ongoing investigation into alleged instances of foreign exchange violations.