On June 11, the Enforcement Directorate (ED) imposed a show-cause notice to WazirX and its executives Nischal Shetty and Sameer Mhatre for having violated guidelines in link with money transfers totalling Rs 2,790.74 crore.
WazirX is a cryptocurrency platform based in India that permits customers to exchange virtual currencies like Bitcoin, Ethereum, Tron, Ripple, and Litecoin.
According to the ED, Chinese nationals funnelled about Rs 57 crore in proceeds of crime by converting Indian rupee payments into the cryptocurrency Tether and then transferring them to Binance Wallet, a Cayman Islands-based exchange, based on “instruction provided from abroad.”
The ED stated that “none of the transaction dealings are available on the blockchain for any inspection or audit’’
ED has yet to issue a show-cause notice to WazirX, according to Nischal Shetty, the company’s CEO. “All applicable laws are followed by WazirX. By following KYC and AML processes, we go above and beyond our legal obligations, and we have always provided the information to law enforcement authorities when requested.”
The Reserve Bank of India has stated that banks must conduct customer due diligence in accordance with regulations governing the standards for Know Your Customer, Anti-Money Laundering, and Counter-Terrorism Financing, as well as the obligations of regulated entities under the Prevention of Money Laundering Act, 2002.