After serving a notice to 16 fintech firms for money laundering, ED has now frozen the bank deposits of WazirX, a prominent crypto currency exchange. According to ED, the cryptocurrency exchange did not carry out enhanced due diligence or raise suspicious transaction reports. Such reports are raised when a reporting entity suspects that funds are being used for terrorist financing or criminal activities.
Besides freezing WazirX’s bank accounts, ED also searched the premises of Zanmai, a cryptocurrency exchange in India. According to ED, Binance is the sole owner of WazirX. The two companies operate on the same platform, but claim to use different crypto currencies.
ED has frozen WazirX funds worth Rs 64-Cr due to its alleged role in money laundering. The investigation has been conducted under the Prevention of Money Laundering Act (PMLA). The ED has claimed that Sameer Mhatre had remote access to WazirX’s database and did not disclose the details of any crypto assets transactions. He also failed to provide bank account details and verify physical addresses. The ED also claimed that WazirX’s alleged ‘assets’ were purchased with the proceeds of fraudulent Instant Loan Apps.
ED has also seized another fintech firm, Yellow Tune, which was incorporated by Chinese nationals. The two were allegedly engaged in facilitating the laundering of criminal proceeds through the crypto route. Ultimately, the investigation revealed that the ‘Assisting’ in Money Laundering has led to a freezing of WazirX funds worth Rs 64-Cr.