Klever
  • Home
  • Global
  • Exchange
  • Wallet
  • Education
  • NFTs
  • Announcements
  • Opinions
  • Marketcap
No Result
View All Result
  • Login
  • Register
Klever News
  • Home
  • Global
  • Exchange
  • Wallet
  • Education
  • NFTs
  • Announcements
  • Opinions
  • Marketcap
No Result
View All Result
Klever News
Home Global
Indian enforcement agency raids Wazirx director on money laundering concerns

Indian enforcement agency raids Wazirx director on money laundering concerns

Blame game erupts between Binance & Wazirx on ownership. Users nervous after $8.5 million freeze

by Jagdish Kumar
August 16, 2022
in Global, Opinions
Reading Time: 5 mins read
3k
A A
0
Share on FacebookShare on Twitter

India’s multi-disciplinary organization mandated with investigating offenses of money laundering and violations of foreign exchange laws, the Directorate of Enforcement (ED) has conducted searches on one of the directors of Wazirx, a crypto exchange operating in India.

You might also like

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

February 22, 2023
7.5k
Klever Wallet: A Secure Solution for Managing Your Crypto Assets

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

February 14, 2023
7.5k

The search was conducted in regard to the fact that some Chinese-backed instant loan application companies have routed their profit by investing in cryptocurrency through Wazirx.

Under the Prevention of Money Laundering Act (PMLA) on 3 August 2022, ED conducted searches on the premises of Sameer Mhatre, director of Zanmai Lab, which owns the exchange.

Ed says that due to lax KYC norms, Chinese individuals have used this platform to route money to their country. It also said that even though Mhatre has complete remote access to its database, he is not sharing this information with the investigative agency.

During the search, ED also decided to freeze close to $8.5 million lying with Waxirz under the PMLA act. 

ED in a statement said that the majority of the cash was observed to have been redirected to the WazirX exchange, and the crypto assets subsequently purchased were transferred to unidentified international wallets.

Investigators think that Zanmai Labs, the entity that owns WazirX, has established “a web of agreements” involving businesses in Singapore, the US, and the Cayman Islands. To “obscure the ownership of the crypto exchange” is the goal. 

According to ED, WazirX is unable to account for the lost cryptocurrency assets due to inadequate KYC standards, loose regulatory monitoring of transactions between WazirX and Binance, and non-recording of transactions on Blockchains to save money, and non-recording of the KYC of the opposing wallets.

ED made the charge that Wazirx has never attempted to locate these cryptocurrency holdings. It has deliberately helped roughly 16 accused fintech companies launder criminal funds using the crypto method by promoting obscurity and having inadequate AML standards, the agency added.

The company’s managing director, Nischal Shetty, had previously asserted that WazirX is an Indian exchange that manages all crypto-crypto and INR-crypto trades and only has intellectual property (IP) and preferential agreement with Binance. 

However, Zanmai says that they only participate in INR-crypto transactions and Binance handles all other transactions on WazirX.

In order to avoid regulation by Indian regulatory organizations, “they are offering conflicting & unclear responses,” the ED claimed.

Blame game begins between Binance & Wazirx

Declining that Wazirx is owned by Binance, the US-based crypto exchange Chief Communications Officer Patrick Hillmann said that in 2019, the company would be good to enter the Indian market through that partnership with Wazirx. “For the past two years, we are still debating with Wazirx to pass ownership to us”, Hillman stated. 

On the ED investigation, Hillmann said that they came to know about this only through the news. ED is not in touch with them, but their global investigations team is looking forward to assisting ED if they reach out to them.

Wazirx CEO Nischal Shetty on its part said that he has all the legal documents to show that Binance is the owner of Warzix and it controls all crypto-to-crypto trading along with crypto deposits and withdrawals on the platform.

In an interview with a business portal, Shetty said that Zanmai Labs is a local entity that operates Wazirx, which is owned by him along with his co-founders. “They have a license from Binance to process INR transactions. Wazirx is a brand and product owned by Binance after the acquisition way back in 2019”. 

Shetty also stressed that since the acquisition, it has been reported in the media that Wazirx is owned by Binance, but Binance never objected to this, which shows that they own it.

“The acquisition took place when there was Reserve Bank of India (RBI) ban on crypto trading through banking platforms and after the ban was lifted and Indian entity was required to process INR deposit and withdrawals, this is where our local company, Zanmai, got the license form Wazirx from Binance”, Shetty underlined.

In a series of tweets on 5 August 2022, Binance chief Changpeng Zhao said that it doesn’t own WazirX. 

“Binance only provides wallet services for WazirX as a tech solution. There is also integration using off-chain tx, to save on network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading, and initiating withdrawals,” the tweet added. 

However, Zhao shared a tweet of a business daily on 5 April 2021 that reads, “Binance-owned Indian crypto exchange WazirX crosses $200m in daily trading volume; eyes $1b in 2021.”

In a blog post on 5 August 2022, Binance said that the 2019 acquisition of Wazirx was limited to an agreement to purchase certain assets and intellectual property of WazirX. Binance did not purchase any equity and does not own any equity in Zanmai Labs.

All workers of WazirX work from home, the company’s registered office is a two-chair coworking WeWork space, and Binance oversees all cryptocurrency transactions. It operates on cloud-based software Amazon Web Services (AWS) Mumbai, which is again without any known office, or any known employee and rarely responds to queries, ED said.

WazirX was given enough chances to present its view, but it never provided the cryptocurrency transactions of the questionable fintech applications or disclosed the KYC of the wallets. 

According to the enforcement directorate, the majority of transactions are not also logged on the blockchain.

As for WazirX, they say they did not even keep track of the bank account information used to deposit money into the exchange in order to buy cryptocurrency assets until July 2020. 

There is no actual address verification. 

“The clients’ sources of funding are not checked”, ED said, adding further that no Suspicious Transaction Reports (STRs) were raised during such large transactions, where these Chinese transactions are very high-value assets.

Tags: money launderingWazirX
Advertisement Advertisement
Previous Post

StarHeroes, a blockchain-based Web3 game, receives a grant from Microsoft

Next Post

Function over fun? Analyst says P2E games don’t need to be ‘fun’ to retain users

Jagdish Kumar

Jagdish Kumar

Reporting & writing on crypto & blockchain for the past few years. A content eagle, journalist & writer with a passion to explore new technologies that can change human lives. Joined Klever to make Crypto simple. Follow me on Twitter @TokenBharat or email me at jagdish@klever.io

Related Stories

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

by Klever
February 22, 2023
0
7.5k

We are excited to announce that Klever has recently joined the Web3 Domain Alliance, a group dedicated to promoting the...

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

by Isabela Bellumat
February 14, 2023
0
7.5k

With so many options available, it can be difficult to determine which wallet is the best choice for your digital...

The Rise of Decentralized Autonomous Organizations: Transforming the Future of Business and Society

The Rise of Decentralized Autonomous Organizations: Transforming the Future of Business and Society

by Warren Manuel
February 10, 2023
0
7.3k

Imagine a world where businesses and organizations operate with complete transparency, security, and autonomy. A world where intermediaries and central...

Revolutionizing Investment: Can AI be Your Next Financial Advisor?

Revolutionizing Investment: Can AI be Your Next Financial Advisor?

by Warren Manuel
February 9, 2023
0
7.3k

Investment and financial management have come a long way in the digital age. With the advent of Artificial Intelligence (AI),...

Next Post
Function over fun? Analyst says P2E games don’t need to be ‘fun’ to retain users

Function over fun? Analyst says P2E games don’t need to be ‘fun’ to retain users

Bitcoin price sees firm rejection at $24.5K as traders doubt strength

Bitcoin price sees firm rejection at $24.5K as traders doubt strength

Please login to join discussion
Download Klever Wallet Download Klever Wallet Download Klever Wallet
ADVERTISEMENT

Recommended

Ethereum

Coin of the Week: Ethereum (ETH)

November 14, 2021
7.5k
Tron (TRX)

Coin of the Week: Tron (TRX)

May 19, 2022
7.6k

Popular Story

  • Stand a chance to win your share of 10,000 KLV

    Stand a chance to win your share of 10,000 KLV

    8398 shares
    Share 3359 Tweet 2100
  • Test drive Klever Wallet, K5 and Win 1000 KLV & 1 KFI

    7057 shares
    Share 2823 Tweet 1764
  • Bitcoin battles back from record losses to $21,000

    5916 shares
    Share 2366 Tweet 1479
  • Klever showcases its blockchain ecosystem on a Time Square billboard

    5362 shares
    Share 2145 Tweet 1341
  • K5 adds new blockchain and KleverSafe support in the latest Android version

    5076 shares
    Share 2030 Tweet 1269

Follow us on Twitter

Klever News

Join the Klever community
Growing together we are stronger.
Be sure to follow us on social media to stay up to date.

Categories

  • Announcements
  • Coin of the Week
  • Education
  • Exchange
  • Games
  • Global
  • Hardware Wallet
  • Market Updates
  • NFTs
  • Opinions
  • Sponsored
  • Wallet
Download Klever Wallet Download Klever Wallet Download Klever Wallet
ADVERTISEMENT

Recent News

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

February 22, 2023
Klever Wallet: A Secure Solution for Managing Your Crypto Assets

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

February 14, 2023
  • Sponsored Content
  • Advertise
  • Contact Us
  • RSS Feed

© 2022 Klever News - Premium Crypto news & insights by Klever Finance.

  • Login
  • Sign Up
No Result
View All Result
  • Home
  • Global
  • Exchange
  • Wallet
  • Education
  • NFTs
  • Announcements
  • Opinions
  • Marketcap

Welcome Back!

Sign In with Google
OR

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Sign Up with Google
OR

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
-
00:00
00:00

Queue

Update Required Flash plugin
-
00:00
00:00
Go to mobile version