Big indian crypto exchange WazirX suspect to fraud!

8/6/2022, 06:12 AM
Big indian crypto exchange WazirX suspect to fraud!
A major Indian cryptocurrency exchange, Wazirx, has had its bank assets of more than $8 million frozen by the Directorate of Enforcement (ED). The exchange was supposedly acquired by Binance in 2019. However, Binance CEO Changpeng Zhao (CZ) now claims that the acquisition was “never completed.” Wazirx, however, maintains that it was acquired by Binance.

  • India Freezes Crypto Exchange Wazirx's Bank Assets
  • Binance provides wallet services for WazirX as a tech solution
  • After the criminal investigation began, many fintech apps have shutten down
  • There is no check on the source of funds of their clients
  • WazirX doesnt provide details of the transactions relating to the crypto assets
The ED on Friday searched the director of WazirX cryptocurrency and froze its bank assets worth Rs 64.67 Crore for assisting accused instant loan App companies in laundering of fraud money via purchase and transfer of virtual crypto assets.
Zhao said that Binance only provides wallet services for WazirX as a tech solution.

WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals, he said. It is the largest crypto exchange in India and its annual trading volume exceeded $43 billion in 2021.

Shetty, co-founder of WazirX, disputed Zhao's claims in a series of tweets. Zanmai Labs has agreements with Crowdfire Inc. USA, Binance (Cayman Islands), Zettai Pte Ltd Singapore.

An ED official said, after the criminal investigation began, many fintech apps have shut shop and diverted profits. While doing fund trail investigation, we found that large amounts of funds were diverted by the fintech companies to purchase crypto assets and launder them abroad. These companies and their virtual assets are untraceable at the moment.

Directorate of Enforcement (ED) has conducted searches on one of the directors of M/s Zanmai Lab Pvt Ltd, which owns the popular cryptocurrency exchange Wazirx and has issued a freezing order to freeze their bank balances to the tune of INR 64.67 crore.
- India’s Directorate of Enforcement

Summons were issued to the crypto-exchanges. It is seen that maximum amount of funds were diverted to WazirX exchange and the crypto-assets so purchased have been diverted to unknown foreign wallets. Most of the transactions are not recorded on the blockchain either.

WazirX informed us that prior to July 2020, they did not even record the bank account details from which funds were coming into the exchange to purchase crypto assets. No physical address verification is done. There is no check on the source of funds of their clients.

Because of the non-cooperative stand of the director of WazirX exchange, a search operation was conducted on August 3 and it was found that Sameer Mhatre, director of WazirX, has complete remote access to the database of the company. Despite this, he is not providing details of the transactions relating to the crypto assets, purchased from proceeds of crime of the instant loan app fraud.

Our source for this is: Times Of India