WazirX, which recently had its assets blocked by India’s financial criminal offense agency as a result of an inquiry into potential violations of foreign exchange legislation, is owned by Binance, one of the biggest digital currency exchanges in the world.
The Indian government is investigating many fintech firms about alleged misbehavior on instant loan applications that offer short-term loans.
The ED asserted in a press release that WazirX actively helped around 16 questionable fintech companies launder “the proceeds of criminality utilizing the crypto method.”
The authority consequently froze $8.1 million in WazirX money. The ED has charged the platform with allegedly trafficking 350 million dollars received unlawfully from fast loan companies.
According to Reuters, WazirX has not yet issued a statement opposing the asset confiscation by the Federal Enforcement Directorate.
The searches were directed at a director of Zanmai Lab, the business that owns WazirX. Changpeng ‘CZ’ Zhao, the CEO of Binance, denied reports that his business owns WazirX on Twitter after publishing the story.
Quick thread on Binance and WazirX, and some incorrect reporting.
Binance does not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders.
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ED learned through a fund trail investigation that fintech companies moved significant sums of money to purchase cryptocurrency assets and then be laundered abroad.
According to the announcement, most of the cash was redirected to the WazirX exchange, and purchases of cryptocurrency were made using unidentified overseas wallets.
Is Binance not Involved With WazireX?
Binance’s choice to entirely distance itself from the circumstance reveals its attempt to come across as innocent. As CZ informs consumers, Binance solely provides wallet services to WazirX as a technological solution. To lower network fees, off-chain activities are also included.
This can demonstrate that WazirX controls all other exchange processes, including user registration, KYC, trading, and starting withdrawals.
A complaint similar to WazirX’s encompassed 2.35 billion USD from 2017 to 2021 was aimed against Binance about two months ago. It claimed “indirect” money laundering, though it was believed to have occurred.
Recent allegations surrounding the administration of the network by Zanmai Labs, as well as the operations of WazirX, are very troubling, said the CEO of Binance.
4/ Recent allegations about the operation of WazirX and how the platform is managed by Zanmai Labs are of deep concern to Binance. Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible.August 5, 2022
“Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible.”