Image Credits: Inc42
A show-cause notice was issued y the Enforcement Directorate (ED) to the cryptocurrency exchange platform WazirX, an Indian crypto exchange platform for trading various digital currencies, and the directors of the company Nischal Shetty and Sameer Mhatre on the 11th of June. It was issued under the Foreign Exchange Management Act (FEMA) 1999, for transactions involving cryptocurrencies worth Rs 2,790.74 crore. The enforcement directorate launched the FEMA inquiry based on the money laundering accusations that are being faced by the Chinese – owned “illegal” online betting platform.
A few Chinese nationals have been accused of laundering returns of crimes worth almost Rs 57 crore by converting the Indian Rupee deposits into cryptocurrency Tether and transferring them to an exchange registered in the Cayman Islands, called Binance Wallet, based on “instructions received from abroad” said the law enforcement agency.
With no transactions available on the blockchain for any form of audit and investigation, the ED said that during the period of investigation, WazirX users have received incoming cryptocurrency worth ₹880 crores from Binance accounts and transferred out digital currencies worth ₹1,400 crores to Binance accounts via its pool account. The ED also mentioned that the WazirX customers could transfer ‘valuable’ cryptocurrencies to any person in any location and nationality in the absence of any proper documentation whatsoever, which makes it a haven for users looking for money laundering or any other illegitimate activities.