Crypto: In India, the assets of one of the largest exchanges have been frozen

After several attempts to ban cryptos in the country, Indian authorities have decided to enact strict regulations to oversee the sector. They located Wazirx, one of the largest active exchanges in the country.

Wazirx in turmoil

In India, on August 5, the Directorate of Law Enforcement (DE) announced the freeze of $8.14 million in bank assets held by one of the country’s largest crypto exchanges, Wazirx. The authorities accuse the exchange of opaque activities in the country.

The Wazirx bank asset freeze follows a months-long investigation it conducted against non-bank financial firms and their fintech partners for predatory lending practices that violate Federal Reserve of India guidelines.

Management says it discovered large sums of money being diverted from fintech companies to buy crypto assets and then laundering them abroad. Furthermore, these companies and their virtual assets are currently untraceable. She then explains that as part of her efforts to shed light on this case, she contacted Wazirx for her cooperation.

But the collaboration did not go as planned. DE claimed that Wazirx executives’ responses were contradictory and ambiguous and that they were given to avoid scrutiny by financial regulators and regulators.

“Due to the uncooperative attitude of the director of the Wazirx Scholarship, a search operation has been conducted. Mr. Sameer Mhatre, Director of Wazirx, was found to have full remote access to the Wazirx database but still no transaction details related to crypto assets acquired from the products by Instant Loan APP Fraud Crime (… ) By promoting opacity and lax AML standards, it has actively supported some 16 fintech companies accused of laundering criminal proceeds through the crypto route.”we read in the official press release.

In addition, Indian authorities are accusing Binance of being an accomplice of Wazirx. They relied on the platform’s 2019 announcement regarding its acquisition of Zanmai Labs, the company that operates Wazirx. Indian public opinion has always viewed Wazirx as a Binance-owned company.

Rejection of Changpeng Zhao

Facing allegations of Binance’s complicity and heightened interest in the case, platform founder Changpeng Zhao filed a lawsuit Twitter that the Zanmai Labs acquisition process was never completed.

“On November 21, 2019, Binance published a blog post noting that it had acquired Wazirx. This transaction was never completed. At no time has Binance owned any interest in Zanmai Labs, the company that operates Wazirx.”he wrote afterwards.

He also clarified that Binance only offers wallet services for Wazirx as a technical solution before adding this “Wazirx is responsible for all other aspects of the Wazirx exchange including user registration, Know Your Customer (KYC), trading and initiating withdrawals.”.

Following Zhao’s tweets, Nischal Shetty, founder of Wazirx, strongly pounded that the deal for Binance to acquire his company was indeed finalized and that Zanmai was licensed by Binance to operate INR trading pairs -crypto on Wazirx while Binance crypto -zu mines -crypto pairs and processes crypto withdrawals.

Additionally, he shared that Binance has root access to its AWS servers, owns all crypto assets and receives all crypto profits from Wazirx.

The exchange between the two entrepreneurs is becoming increasingly tense.

Indian exchange Wazirx, accused of helping fintechs eliminate illicit financial services products in India, has frozen millions of dollars in its bank assets. Considered to be an entity belonging to Binance, Indian authorities have accused the flagship platform of complicity in Wazirx’s actions, which the Binance boss refutes.


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Luc Jose Adjinacou avatar

Luc Jose Adjinacou

Far from dampening my enthusiasm, an unsuccessful cryptocurrency investment in 2017 only heightened my enthusiasm. I therefore decided to study and understand the blockchain and its many uses and use my pen to share information related to this ecosystem.

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