ED: WazirX crypto assets untraceable | Hyderabad News

ED officials issued orders to freeze bank accounts of WazirX which had a balance of about Rs 64 crore. ED also searched the offices of Zanmai Lab Pvt Ltd which owns WazirX

HYDERABAD: The Enforcement Directorate on Friday said that the crypto assets of cryptocurrency exchange WazirX were untraceable. Accusing it of not cooperating with the investigation, the officials issued orders to freeze bank accounts of the company which had a balance of about Rs 64 crore. The investigation agency also searched the offices of Zanmai Lab Pvt Ltd which owns WazirX.
The investigation is part of ED digging into money laundering allegations against several non banking finance companies and their fintech partners that have also been charged with predatory lending practices loan apps. The companies use tele-callers who misuse personal data and extort high interest rates from borrowers. The fintech companies backed by Chinese funds could not get NBFC licenses from RBI to lend money and signed MoUs with defunct NBFCs to use their license.
An ED official said, “After the criminal investigation began, many fintech apps have shut shop and diverted profits. While doing fund trail investigation, we found that large amounts of funds were diverted by the fintech companies to purchase crypto assets and launder them abroad. These companies and their virtual assets are untraceable at the moment. Summons were issued to the crypto-exchanges. It is seen that maximum amount of funds were diverted to WazirX exchange and the crypto-assets so purchased have been diverted to unknown foreign wallets.”
Zanmai Labs has agreements with Crowdfire Inc. USA, Binance (Cayman Islands), Zettai Pte Ltd Singapore. An ED official added, “Despite giving multiple opportunities, WazirX failed to give details of the crypto transactions of the suspect fintech app companies and reveal the KYC of the wallets. Most of the transactions are not recorded on the blockchain either. WazirX informed us that prior to July 2020, they did not even record the bank account details from which funds were coming into the exchange to purchase crypto assets. No physical address verification is done.
“There is no check on the source of funds of their clients. Because of the non-cooperative stand of the director of WazirX exchange, a search operation was conducted on August 3 and it was found that Sameer Mhatre, director of WazirX, has complete remote access to the database of the company. Despite this, he is not providing details of the transactions relating to the crypto assets, purchased from proceeds of crime of the instant loan app fraud.”
Hyderabad: The Enforcement Directorate on Friday said that the crypto assets of cryptocurrency exchange WazirX were untraceable. Accusing it of not cooperating with the investigation, the officials issued orders to freeze bank accounts of the company which had a balance of about Rs 64 crore. The investigation agency also searched the offices of Zanmai Lab Pvt Ltd which owns WazirX.
The investigation is part of ED digging into money laundering allegations against several non banking finance companies and their fintech partners that have also been charged with predatory lending practices loan apps. The companies use tele-callers who misuse personal data and extort high interest rates from borrowers. The fintech companies backed by Chinese funds could not get NBFC licenses from RBI to lend money and signed MoUs with defunct NBFCs to use their license.
An ED official said, “After the criminal investigation began, many fintech apps have shut shop and diverted profits. While doing fund trail investigation, we found that large amounts of funds were diverted by the fintech companies to purchase crypto assets and launder them abroad. These companies and their virtual assets are untraceable at the moment. Summons were issued to the crypto-exchanges. It is seen that maximum amount of funds were diverted to WazirX exchange and the crypto-assets so purchased have been diverted to unknown foreign wallets.”
Zanmai Labs has agreements with Crowdfire Inc. USA, Binance (Cayman Islands), Zettai Pte Ltd Singapore. An ED official added, “Despite giving multiple opportunities, WazirX failed to give details of the crypto transactions of the suspect fintech app companies and reveal the KYC of the wallets. Most of the transactions are not recorded on the blockchain either. WazirX informed us that prior to July 2020, they did not even record the bank account details from which funds were coming into the exchange to purchase crypto assets. No physical address verification is done.
“There is no check on the source of funds of their clients. Because of the non-cooperative stand of the director of WazirX exchange, a search operation was conducted on August 3 and it was found that Sameer Mhatre, director of WazirX, has complete remote access to the database of the company. Despite this, he is not providing details of the transactions relating to the crypto assets, purchased from proceeds of crime of the instant loan app fraud.”