India’s anti-money laundering agency is examining if Binance Holdings Ltd. had a role to play in an ongoing investigation involving betting apps, according to people with knowledge of the matter.
The Enforcement Directorate has summoned Binance executives for questioning and is awaiting a response, the people said, asking not to be identified as the matter is under investigation. India is probing betting apps run by Chinese operators, which collected more than Rs 1,000 crore ($134 million) over the past 10 months, for allegedly laundering part of the money through the WazirX cryptocurrency exchange. Binance acquired WazirX in 2019.
However, a Binance spokesperson said the exchange had not received any summons in June or this month. “We have always been a proactive player in fighting crime,” the spokesperson said. “We comply with regulator requests all around the world and we don’t comment on any specific engagements.” An Indian Enforcement Directorate spokesperson didn’t respond to calls.
Incorporated in the Cayman Islands without any corporate headquarters, Binance has been facing regulatory crackdown as nations intensify scrutiny of the industry amid concerns that cryptocurrencies are being used to conceal proceeds of money laundering, drug dealing and terrorism.
The operators of the apps used wallets with WazirX for buying, converting and transferring the money to wallets on Binance’s platform, the people said. The Enforcement Directorate has already issued a show-cause notice to WazirX over alleged contravention of foreign exchange management rules in transactions involving cryptocurrencies worth Rs 2,790 crore.
The Indian agency found that Binance didn’t collect necessary know-your-customer documents from clients in most of the transactions, the people said. The exchange also didn’t collect information detailed by global anti-money laundering watchdog the Financial Action Task Force (FATF) for virtual currencies, they added.