Key Takeaways

India’s Directorate of Enforcement has issued a show-cause notice to WazirX for violating foreign exchange laws.
WazirX is accused of making unreported transactions with Binance and failing to comply with anti-money laundering regulations.
India’s government has historically had an anti-crypto stance.

Share this article

India’s Directorate of Enforcement has issued show-cause notices to the directors of the WazirX exchange alleging unreported cryptocurrency transactions worth $3.8 billion and a lack of security checks to counter money laundering. 

Leading Indian Exchange Faces Serious Charges

WazirX, one of India’s top cryptocurrency exchanges, is under investigation by the Directorate of Enforcement.

The Directorate of Enforcement, known locally as ED, is the judiciary branch responsible for protecting the country’s financial laws. 

The ED alleges that WazirX’s directors, Nischal Shetty and Sameer Hanuman Mhatre, conducted unreported transactions with Binance worth $1.2 billion and failed to comply with anti-money laundering (AML) laws. 

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.

— ED (@dir_ed) June 11, 2021

The Indian media outlet Business Today published comments from ED officials on the exact nature of charges against them. According to the report, the authorities found that WazirX transferred tokens worth $1.2 billion between the company’s Binance pool account and customers. Binance acquired WazirX in November 2019. 

Moreover, the ED has accused the exchange of enabling money laundering by facilitating fiat conversion to cryptocurrencies, which can be sent anywhere in the world without any jurisdiction. 

The notice sent to WazirX directors cited violations of the Foreign Exchange Management Act, 1999 as the reason for the accusations. 

The act in question formulated the country’s foreign exchange laws. The law implemented strict regulations for transactions involving foreign exchange or securities, making it illegal to “deal in or transfer any foreign exchange or foreign security to any person not being an authorized person.”

Moreover, Indian citizens are not allowed to hold foreign currencies.

One of Wazir’s directors, Shetty, took to Twitter Friday to say that he hadn’t received any show-cause notice yet. The post caused confusion about the validity of the media reports, until ED’s press team confirmed that charges had been filed soon after. 

The country is reportedly moving to regulate digital assets while keeping banking services active for crypto businesses, a positive change to its negative crypto stance over the years. However, the move against one of the largest exchanges today has reignited fears around the government’s dislike for crypto. 

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Dogecoin Gets Three Exchange Listings in One Day

Dogecoin has received three exchange listings over the last 24 hours, according to reports from the community. Three Exchanges Add DOGE On Jan. 13, the Shibu inu dog-themed cryptocurrency was…

Following India’s Crypto Thaw, WRX and MATIC Surge

After India’s Supreme Court lifted the ban on crypto trading two days ago, MATIC and WazirX tokens enjoyed significant jumps in price and volume. Supreme Court’s Declaration Changes Indian Crypto…

Indian Central Bank Reaffirms Anti-Crypto Stance

The Governor of the Reserve Bank of India has clarified the bank’s aversions to cryptocurrencies.  Indian Central Bank Still Anti-Crypto  India’s central bank is still taking a firm stance against…

What is Kusama? How Polkadot’s playground accommodates blockchain de…

Kusama is relatively young and was founded in 2019 by Dr. Gavin Wood, who also founded the Web3 Foundation and co-founded Ethereum. The team behind Kusama is essentially the same…