The Enforcement Directorate (ED) is probing an alleged money laundering of around Rs 2,790 crore through WazirX, one of the leading crypto exchanges. This information has been given in Rajya Sabha. Minister of State for Finance Pankaj Choudhary said in a written reply that the ED is probing two cases related to cryptocurrencies against this crypto exchange under the Foreign Exchange Management Act (FEMA).
“In one case investigation revealed that WazirX used hidden infrastructure from another foreign exchange Binance. Crypto transactions between these two exchanges were not recorded on the blockchains,” Choudhury said. He informed that WazirX has been served a show cause notice under the provisions of FEMA for allowing remittance of crypto assets worth around Rs 2,790 crore. In another case, Indian exchanges including WazirX allowed requests from foreign users to convert one crypto asset into another on their platform and for this, FTX and Binance As transfers from third-party exchanges were used.
Responding to another question, Choudhary said that the definition of cryptocurrencies and non-fungible tokens (NFTs) does not have any border restrictions and international cooperation is needed to prevent violations related to them. Recently there have been some cases of violation of rules against crypto exchanges. US exchange Kraken is reportedly facing economic sanctions against Iran breach Due to which investigation is being faced. The exchange allowed Iranian users to buy and sell digital tokens. The US Treasury Department has launched an investigation against the exchange and it could be fined.
Kraken allowed users in Iran, Syria and Cuba to open accounts and trade crypto assets, in violation of a government ban on doing business with these three countries. The report claimed that the exchange’s CEO, Jesse Powell, last month provided a spreadsheet showing the services provided to customers in these countries.