India investigates Binance for foreign exchange regulation violations

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TL;DR Breakdown

• Binance is being investigated for money laundering.
• WazirX CEO lends his platform to assist with research.

India’s financial cybercrime agency announced on Friday that WazirX is under investigation. This is the largest cryptocurrency exchange system in the country, owned by Binance. The investigation began with the lawsuits that the website has received for violation of exchange regulations.

The lawsuit comes as the government of India urges financial authorities not to use cryptocurrencies. The country tries to join China, where cryptocurrencies are banned in the business sphere.

The Federal Execution Directorate in the country said that the investigation began with a high-value transaction. WazirX entered into its system a transaction valued at Rs 27.90 billion which equates to $381.93 million.

Binance’s fight against Indian regulators

Binance

The WazirX platform has been owned by Binance since 2019 and has been lending crypto exchanges ever since. While Binance is popular globally, WazirX gained fame in late 2019 when crypto took off.

This platform has also had a long investigative path with the ED since it was accused of money laundering in China. This case involved illegal gambling formed within the Asian region.

During the investigation against Binance and WazirX, it was discovered that the laundering offense was 570 billion rupees. This money was said to have passed through the hands of the exchange platform without being justified by the authorities.

Increased pressure on WazirX

The investigation agency in India clarifies that WazirX has not provided the documents for the investigation to be finalized. The platform has not helped to clarify doubts about violating AML, CFT, and FEMA guidelines.

However, WazirX said it had received no notification from the investigative agency. The exchange maintains that it complies with all laws enforced by the government of India.

WazirX CEO Nischal Shetty notes that the platform goes beyond its legal obligations by following the KYC process. He claims to have always tried to get the platform to inform law enforcement authorities when needed. The executive director of WazirX was very open to solving the money laundering case imposed on the platform.

However, the ED notes that transactions valued at 2,280 million rupees were not recorded on the Blockchain for any investigation. The agency adds that the Binance-backed Indian platform’s users transfer funds without proper documentation. This makes WazirX a haven for illicit businesses to launder money.

Shetty said that the platform keeps user logs with information about their official identity. So the website will cooperate with ED if it receives a formal communication to initiate a money-laundering investigation.

For now, the virtual market of India remains in operation with WazirX despite government authorities seeking to ban it. In March, regulators applied a legal project to ban cryptocurrency trading, but this was not completed.