Indian Law Enforcement Investigating WazirX Exchange

Key Takeaways

  • India’s Directorate of Enforcement has issued a show-cause notice to WazirX for violating foreign exchange laws.
  • WazirX is accused of making unreported transactions with Binance and failing to comply with anti-money laundering regulations.
  • India’s government has historically had an anti-crypto stance.

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India’s Directorate of Enforcement has issued show-cause notices to the directors of the WazirX exchange alleging unreported cryptocurrency transactions worth $3.8 billion and a lack of security checks to counter money laundering. 

Leading Indian Exchange Faces Serious Charges

WazirX, one of India’s top cryptocurrency exchanges, is under investigation by the Directorate of Enforcement.

The Directorate of Enforcement, known locally as ED, is the judiciary branch responsible for protecting the country’s financial laws. 

The ED alleges that WazirX’s directors, Nischal Shetty and Sameer Hanuman Mhatre, conducted unreported transactions with Binance worth $1.2 billion and failed to comply with anti-money laundering (AML) laws. 

The Indian media outlet Business Today published comments from ED officials on the exact nature of charges against them. According to the report, the authorities found that WazirX transferred tokens worth $1.2 billion between the company’s Binance pool account and customers. Binance acquired WazirX in November 2019. 

Moreover, the ED has accused the exchange of enabling money laundering by facilitating fiat conversion to cryptocurrencies, which can be sent anywhere in the world without any jurisdiction. 

The notice sent to WazirX directors cited violations of the Foreign Exchange Management Act, 1999 as the reason for the accusations. 

The act in question formulated the country’s foreign exchange…

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