Binance’s WazirX exchange is under investigation in India for alleged violations of foreign exchange regulations.
India’s anti-financial crime agency announced today that it is investigating the WazirX cryptocurrency exchange on suspicion of violating foreign exchange regulations. The regulator is investigating Binance’s crypto exchange for transactions valued at 27.90 billion rupees ($ 381.93 million).
In a statement, the Federal Department of Enforcement said it was investigating WazirX when it was investigating a money laundering case involving illegal Chinese-owned online betting applications. The agency added that it discovered that some of the funds on the WazirX exchange platform were being converted into cryptocurrencies.
“WazirX does not collect the required documents in clear violation of the Basic Mandatory Anti-Money Laundering (AML) and Anti-Terrorist Finance (CFT) and FEMA Guidelines.” added the agency.
As of now, WazirX has not yet received any notification from the agencies claiming that it complies with financial regulations in India. Nischal Shetty, CEO and Founder of WazirX, said that “We go beyond our legal obligations by following Know Your Customer (KYC) and AML processes and always providing information to law enforcement agencies when needed.”
The regulator complained that some WazirX users could transfer funds without proper documentation, making the platform a safe haven for people looking to launder funds. The ED cited a transaction valued at 22.80 billion rupees ($ 311 million) that was not recorded on the blockchain. This ensures that it is impossible to check the transaction.
However, WazirX claims that it keeps track of all users on its platform. “We are able to track all users on our platform with official identity information. Should we receive a formal notification or notification from the emergency room, we will fully cooperate with the investigation. “ said Shetty.
The Indian cryptocurrency market is complicated. Cryptocurrency trading is allowed, but the government is looking at ways to ensure that it doesn’t. The Reserve Bank of India has warned banks and other financial institutions not to support crypto-related businesses.