Indian Authorities Froze WazirX Bank Accounts for Money Laundering Charges

WazirX, one of the most renowned cryptocurrency trading platforms in India has landed under the radar of the Enforcement Directorate (ED), a government market regulatory body. 

As reported by Asian News International, the Enforcement Directorate searched the premises of the trading platform’s director, and following the exercises, confiscated the sum of Rs 64.67 crores worth approximately $8.13 million belonging to the exchange.

The accusation brought against WazirX was that it was complicit in permitting funds from accused instant loan app companies in the laundering of fraud money through the purchase and transfer of virtual crypto assets. Since the inception of digital currencies, regulatory authorities have always been very cautious about the role of crypto platforms in financial impropriety.

With transactions in digital currencies largely tagged as anonymous, it has continued to attract scrutiny from market watchdogs, most of whom require platforms that will be involved in offering these crypto-linked services to be proactive in implementing anti-money laundering measures.

The Allegations on WazirX

Per the Times of India, WazirX came under the radar of regulatory authorities because as much as $351 million linked to the loan apps were transacted through the exchange. Per the observations, The Times said the transactions were not registered on the blockchain which would have made them trackable.

WazirX is one of the exchanges that is pioneering the emergence of regulatory oversight in India, and amongst the key stakeholders that are helping the government bridge the gap with the industry. It is yet unclear what the proceedings will be following the asset seizure.

India is just warming up to cryptocurrencies after about a decade of back and forth on whether the nascent asset class should be allowed to stand or not. While the industry does not need such negative publicity as that emanating from WazirX, and Binance exchange, the owner of the Indian trading platform may help devise a more robust transaction monitoring system.

India is currently at a tipping point, and events such as that from WazirX may not contribute in any meaningful way to help the overall push.