The Enforcement Directorate (ED) on Friday conducted searches on one of the directors of Zanmai Lab, which owns cryptocurrency exchange WazirX. It has frozen bank assets worth Rs 64.67 crore.
The ED is conducting money laundering investigation against many Indian NBFC companies and their fintech partners for predatory lending practices.
The agency conducted raids against the director of Zanmai Lab on August 3 in Hyderabad and alleged he was “non-cooperative”. Its probe against the crypto exchange is linked to its ongoing investigation against a number of Chinese loan apps (mobile applications) working in India. The agency had charged WazirX last year for alleged contravention of the Foreign Exchange Management Act (FEMA).
“It was found that Sameer Mhatre, Director WazirX, has complete remote access to the database of WazirX, but despite that he is not providing the details of the transactions relating to the crypto assets, purchased from the proceeds of crime of instant loan app fraud.” “The lax KYC norms, loose regulatory control of transactions between WazirX and Binance, non-recording of transactions on block chains to save costs and non-recording of the KYC of the opposite wallets has ensured that WazirX is not able to give any account for the missing crypto assets,” the ED alleged in a statement.
It said the company made no efforts to trace these crypto assets. “and having lax AML (anti-money laundering) norms, it has actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route,” it said.
Therefore, the ED said, equivalent movable assets to the extent of Rs 64.67 crore lying with WazirX were frozen under the Prevention of Money Laundering Act (PMLA).
Launched in 2017, WazirX today is one of India’s biggest crypto trading platforms.
(With inputs from PTI)
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