This occurs only a few days after Pankaj Chaudhary, the minister of state for finance, informed the legislature that the ED was looking into two WazirX-related cases for possible violations of the Foreign Exchange Management Act.
According to sources, the Enforcement Directorate (ED) has raided the Hyderabad home of a director of Zanmai Lab, the business that runs the well-known cryptocurrency exchange WazirX, and has also ordered the freezing of its Rs 64.67 crore bank balance.
This occurs only a few days after Pankaj Chaudhary, the minister of state for finance, informed the legislature that the ED was looking into two WazirX-related cases for possible violations of the Foreign Exchange Management Act.
A director of the company named Sameer Mhatre was the target of the raids yesterday. He has full remote access to WazirX’s database, but he withholds information about the transactions.
It’s believed that some rapid lending applications or online financial firms with Chinese backing redirected their profits to purchase cryptocurrencies in order to later launder the money abroad. According to ED officials, these included fintech companies that were refused licences to operate loan businesses because they had exploited personal data and intimidated loan applicants with abusive calls and extortion. To use their licences, these businesses established agreements with shut-down businesses.
After the investigation started, they used cryptocurrency assets to divert their gains and send the money outside.
According to an ED notice, the majority of the funds were redirected to the WazirX exchange, and the cryptocurrency assets that were purchased with those monies were then transferred to unidentified international accounts. According to the agency, it is currently impossible to find these companies or the virtual assets.
Investigators think that Zanmai Labs, the entity that owns WazirX, has established “a web of agreements” involving businesses in Singapore, the US, and the Cayman Islands. To “obscure the ownership of the crypto exchange” is the goal.
Nischal Shetty, the company’s managing director, previously stated that WazirX is an Indian exchange with merely a partnership with exchange Binance, which is domiciled in the Cayman Islands.
