Crypto Money Laundering Probe Points To A China Link: Report

The officials under the scanner are likely to be called for questioning again next week by probe agency.

At least 10 cryptocurrency exchanges are under Enforcement Directorate (ED) scanner for allegedly laundering Rs 1,000 crore for firms being investigated in the instant loan app case. Most of these firms under probe have a China link, according to an Economic Times report.

The ED investigation has revealed that the accused first approached the exchanges to buy crypto coins worth more than Rs 1000 crore which were later sent to international wallets. The accused exchanges failed to raise suspicious transaction reports (STRs) to the authorities. In many instances, the KYC details were also found to be dubious.

“While so far the agency has frozen the accounts of WazirX, similar transactions have taken place on the other exchanges and they have been asked to join the probe,” an official close to the development told ET.

The officials of the crypto exchanges, under the scanner, are likely to be called for questioning again next week by the central probe agency.

The Enforcement Directorate is also closely monitoring the recent social media row between WazirX and Binance over the ownership and non-compliance by the Indian exchange. The ED has approached both companies, questioning who is responsible for maintaining the details of the 15 million accounts on the exchange.

Binance, the world’s largest crypto exchange by trading volume, announced the acquisition of WazirX in 2019. Following the recent action by the probe agencies against the Indian crypto platform, Changpeng Zhao, chief of Binance, denied ownership stating that the transaction was never completed.

WazirX founder Nischal Shetty countered the claims and said that the platform was acquired by Binance and they have all legal documents to prove it. 

Shetty, in a tweet, said that Zanmai Labs was managing the operation of WazirX under a licence from Binance. He claimed that the domain name, root access of AWS servers crypto assets and crypto profits of WazirX were owned by Binance.

ED has frozen WazirX’s accounts for assisting 16 fintech companies under investigation on charges of money laundering to divert their alleged proceeds of crime using the crypto route.

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