Law enforcement agencies in India announced the blocking of assets of the WazirX exchange for $ 8.14 million for refusing to cooperate in the investigation of facts of complicity in fraud and money laundering.
The Indian Law Enforcement Authority (ED) clarified that the reason for the blocking of funds was the refusal of the directors of the WazirX exchange, represented by Nischal Shetty and Sameer Mhatre, to assist law enforcement agencies in the investigation.
ED searches the Director of WazirX Crypto-Currency Exchange & freezes its Bank assets worth Rs 64.67 Crore for assisting accused Instant Loan APP Companies in laundering of fraud money via purchase & transfer of virtual crypto assets.
— ED (@dir_ed) August 5, 2022
Department staff conducted an inspection of office space owned by one of the directors of Zanmai Labs Private, the management company of the WazirX exchange. Officials have determined that the exchange is running cloud-based software, employees perform their duties remotely from home, the registered office is a co-working space with two chairs, and crypto transactions are controlled by Binance employees. WazirX staff does not verify the source of customer funds, law enforcement officials assure, and in some cases deliberately do not record the results of cryptocurrency transactions in the company’s operational financial statements.
Recall that the Office of Enforcement is investigating two cases against WazirX at once, related to violations of the Foreign Exchange Management Act (FEMA), as well as actively facilitating fraudulent activities with approximately 16 fintech companies.