Indian authorities freeze $8.1 million in WazirX funds in AML investigation

India's Law Enforcement Directorate alleged that WazirX "actively assisted approximately 16 accused fintech companies in laundering proceeds of crime using the crypto route".

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India's Directorate of Law Enforcement, or ED, has announced that it has frozen approximately $8.1 million in funds and conducted research related to cryptocurrency exchange WazirX as part of of an investigation into instant personal loan fraud.

In an announcement on Friday, the Law Enforcement Branch alleged that WazirX facilitated transactions by anonymous fintech companies “to buy crypto assets and then launder them offshore” as part of a a scheme involving Chinese-backed companies circumventing Indian licensing regulations. In its investigation, the ED said it ordered the freezing of WazirX bank accounts containing 646.7 million Indian rupees, or approximately $8.1 million at the time of publication, and conducted research related to co-founder Sameer Mhatre.

According to the regulator, the investigation was still ongoing. However, the ED claimed the crypto exchange had "lax KYC standards" and "loose regulatory oversight" of transactions between WazirX and Binance, and failed to record information necessary to verify the origin of the funds used. to buy the crypto in the alleged fraud.

“Despite repeated opportunities, WazirX failed to provide crypto transactions of suspicious fintech app companies and reveal KYC of wallets,” the ED said, adding:

"WazirX is unable to account for missing crypto assets. It has made no effort to trace these crypto assets. By encouraging obscurity and having lax AML standards, it has actively helped around 16 fintech companies accused of laundering the proceeds of crime using the crypto route.”

ED seeks director of WazirX Crypto-Currency Exchange and freezes his bank assets worth Rs 64.67 Crore for helping companies instant loan app companies accused of laundering money fraud through the purchase and transfer of virtual crypto assets.

— ED (@dir_ed) August 5...