India’s Enforcement Directorate (ED) froze $8 million in assets of an exchange owned by Binance and that at the same time is the largest cryptocurrency company in the country. The action came after an investigation into the platform, which would have indicated a possible action “outside legal limits.” One of the directors of the operation was raided and his bank accounts were frozen, in what could be one of the largest actions against a broker in the country in recent years. It is important to remember that India’s relationship with cryptocurrencies is not the best, and between the ups and downs, the new action could have harsh dismemberments for the local community. Following the news, Binance said that he does not own the WazirX platform, despite revealing the acquisition in 2020.
Changpeng Zhao, founder and CEO of Binance, said he has yet to complete the transaction citing “some issues” that he declined to detail. Binance announced the acquisition of WazirX in late 2019 in a blog post. The official blog post, which featured a photo of the founders of Zhao and WazirX, also showed the Binance executive’s enthusiasm for the deal.
India Freezes $8 Million Exchange Owned by Binance
Owned by Binance Holdings, WazirX it is one of the largest exchanges operating cryptocurrencies in Indian Territory today. But this Friday (5), the local government, through ED, blocked BRL 42 million from the exchange that belongs to Binance in India.
“The Compliance Board (ED) carried out searches on one of the directors of M/s Zanmai Lab Pvt Ltd, which owns the popular cryptocurrency exchange WazirX, and issued a freezing order to freeze his bank balances worth INR 64, 67 crore”.
According to the Indian agency, several fintechs in the country are being investigated by the local government, which has seen nebulous situations occur in its financial system, mainly with the practice of money laundering. ED stated that Chinese-backed companies have not been approved to operate in the country in recent years, so they are looking for new routes to establish their operations. Part of its operation consists of buying cryptocurrencies to evade money from the country, using platforms like WazirX, for example. Investigating the operation, the authorities realized that the office is practically virtual and works in a coworking space with only two chairs, in addition to an email that rarely responds to demands.
“WazirX runs on cloud-based software (@AWS Mumbai), all employees work from home, the registered office is a 2-chair Wework coworking space, and Binance handles all crypto transactions (which again has no known offices). , no known employees and rarely responds to inquiries at [email protected])”.
At Least 16 Illegal Fintechs May Have Laundered Money on Binance Exchange, Official Says
After the investigation went to the house of the director of Binance last Wednesday (3), they discovered new elements. According to the official ED notean authority in India, the Binance-owned exchange has a weak AML policy, which has allowed 16 fintechs to launder money.
“By encouraging darkness and having lax AML regulations, it has actively helped some 16 fintech companies accused of laundering criminal proceeds using the cryptocurrency route. Therefore, equivalent movable property worth Rs. 64.67 crore lying with WazirX was frozen under PMLA, 2002”.
Binance has yet to publicly comment on the India operation as of this writing. Furthermore, WazirX is also keeping quiet about the case as of Friday afternoon.