The bank accounts belonging to the cryptocurrency exchange WazirX have been defrosted by the Enforcement Directorate, which is India’s law enforcement and economic intelligence agency. According to the official weblog of the exchange, which attributed the same thing to “active cooperation.”
WazirX’s bank accounts have been unfrozen by the ED as a result of the company’s aggressive collaboration and active anti-money laundering (AML) inspections, both of which led to the freezing of suspect accounts. WazirX is now in a position to go on with business as normal regarding its banking activities.
WazirX is doing AML Checks at this time.
It has been revealed that “several” of the 16 fintech businesses and rapid lending applications that are now being investigated by the Enforcement Directorate have utilized WazirX’s platform. These investigations are still ongoing. The exchange said that it had furnished the agency with all of the essential particulars, information, and documents about the purportedly guilty businesses that had made use of its platform.
In addition, the statement from WaxirX said that the corporation has a “zero tolerance” attitude regarding “illegal acts. According to the examination conducted by the exchange, the vast majority of the users whose information had been requested by the ED had previously been flagged as suspicious by the exchange on an internal level and had their accounts closed in 2020-2021.
The debate between Binance and WazirX
It is important to keep in mind that when the ED blocked the exchange’s accounts a month ago, Changpeng Zhao said that Binance did not control the Indian cryptocurrency exchange. This information is relevant to this discussion. He said that it was widely believed that the transaction will be finalized in 2019, however it was never really carried out. A Twitter fight ensued as a result of the same between the co-founder of WazirX, Nischal Shetty, and the CEO of Binance, Zhao.
About 15 million of the registered customers (as of August) of the Indian cryptocurrency exchange were affected by a public dispute that occurred between the CEO of the global cryptocurrency platform Binance, Changpeng Zhao, also known as CZ, and the founders of WazirX, Nischal Shetty. In the meanwhile, Zanmai Labs, which runs WazirX in India, is reportedly looking into legal action amid an ownership dispute with the world’s biggest exchange by volume.
According to investors who spoke to ET, the widespread fear that ensued after Zhao tweeted that customers of WazirX should move their cash to Binance was caused by the tweet. According to a snapshot taken by a user that was inspected by ET, the next day, Binance stopped off-chain transfers to WazirX. This effectively cut off the ability of users to move assets between the two exchanges on an internal level. Transactions that take place off-chain take place outside of the blockchain.
Young crypto investors whose portfolios have been hammered by a decline in the prices of cryptocurrencies and the prohibitive tax regime in India have expressed concern over the safety of their funds on WazirX and the consequences of a soured relationship between the two companies. These young investors’ portfolios have been hammered by a combination of factors, including the decline in the prices of cryptocurrencies and the prohibitive tax regime in India.
Although India does not officially recognize cryptocurrencies, it does tax revenue generated from other types of virtual or digital assets at a rate of 30%. Nirmala Sitharaman, the Minister of Finance, has been presenting a compelling argument in favor of worldwide regulation of cryptocurrencies to combat the threats of money laundering and support for terrorist organizations.
She had proposed, during the G20 Ministerial Symposium on Tax and Development that took place in Bali, that the G20 should investigate whether or not it would be possible to include non-financial assets such as cryptocurrency in the scope of automatic exchange of information between nations to combat tax evasion.