Mumbai-based Indian cryptocurrency exchange WazirX, on Friday, said it hadn't received a show-cause notice from the Enforcement Directorate.
“WazirX is yet to receive any show-cause notice from the Enforcement Directorate as mentioned in today's media reports. WazirX is in compliance with all applicable laws,” the company tweeted.
A couple of hours before, ED had tweeted through its official handle: “ED has issued Show Cause Notice to WazirX Crypto-currency Exchange for contravention of FEMA, 1999 for transactions involving crypto-currencies worth Rs. 2790.74 crore.”
Hours before the ED notice, WazirX CEO Nischal Shetty had tweeted: “Day 953. We're still in the very early days of Crypto. Less than 3% of the internet population has adopted it. There's a lot of opportunity for new entrepreneurs, new startups & for new career opportunities. Think of India specific solutions. Build and win.”
In a detailed statement, the central probe agency said it had stumbled upon the transactions during an ongoing money-laundering probe into the “Chinese-owned” illegal online betting applications.
“It was seen that the accused Chinese nationals had laundered proceeds of crime worth about Rs 57 crore by converting Indian Rupee (INR) deposits into cryptocurrency tether (USDT) and then transferred it to Binance (exchange registered in the Cayman Islands) Wallets based on instructions received from abroad,” it said.
WazirX is owned by Binance, often acknowledged as the world's largest cryptocurrency exchange by trading volume. Chinese-Canadian Changpeng Zhao is the founder and CEO of Binance.
The ED alleged that WazirX does not collect the requisite documents for transactions in clear violation the basic mandatory anti-money Laundering (AML) and combating financing of terrorism (CFT) norms and also FEMA guidelines.
“In the period under investigation, users of WazirX via its pool account, have received incoming cryptocurrency worth Rs 880 crore from Binance accounts and transferred out cryptocurrency worth Rs 1,400 crore to Binance accounts.
“None of these transactions are available on the blockchain for any audit or investigation,” the ED claimed.
In a Twitter thread, WazirX claimed it goes “beyond our legal obligations by following Know Your Customer (KYC) and Anti Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required. We are able to trace all users on our platform with official identity information.”
“Should we receive a formal communication or notice from the ED, we'll fully cooperate in the investigation. Please note: Your funds are absolutely safe on WazirX,” it said.
At the time of writing, Bitcoin was trading at $37,434 or Rs 27.34 lakh.
