ED freezes bank assets worth Rs 64.67 crore of crypto exchange firm

On Friday, the Enforcement Directorate froze bank assets worth Rs 64.67 crore of cryptocurrency exchange firm WazirX. The action was taken after agents from the enforcement agency raided premises linked to the director of the company.

In a tweet, the Law Enforcement Branch alleged that WazirX helped businesses providing instant loans launder fraudulently acquired money by allowing them to purchase and transfer crypto assets.

Crypto exchange companies like WazirX allow consumers to exchange cryptocurrencies for other assets such as cash or other forms of digital currencies.

The assets were frozen three days after the finance ministry told the Rajya Sabha that WazirX was under investigation in two cases relating to the Exchange Management Act 1999.

In response to a question, Minister of State for Finance Pankaj Chaudhary had said that WazirX, operated by Zanmai Labs Private Limited in India, used infrastructure provided by Cayman Islands-based cryptocurrency exchange Binance.

The Cayman Islands are considered a tax haven, where investors are required to pay very low, if any, taxes for the money they invest.

On Tuesday, Chaudhary also said that crypto transactions between WazirX and Binance were “cloaked in mystery.”

“A show cause notice has been issued under the provisions of FEMA [Foreign Exchange Management Act] against WazirX for allowing the outward transfer of crypto assets worth Rs 2,790 crore to unknown wallets,” the Minister added.

Last month the The Enforcement Directorate had sent notices to a number of crypto exchanges, including WazirX, seeking details of their clients’ transactions, according to Money control.

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