Nischal Shetty, the CEO of top crypto Indian exchange WazirX took to Twitter to clarify the ongoing media reports about a show-cause notice in a $38M money-laundering investigation. Shetty said they are yet to receive any formal notice from the Indian financial watchdog, the Enforcement Directorate (ED). He also claimed that Wazirx is in full compliance with all the AML guidelines and applicable rules.
1/3
WazirX is yet to receive any show cause notice from the Enforcement Directorate as mentioned in today's media reports.
WazirX is in compliance with all applicable laws.
— Nischal (WazirX) ?? (@NischalShetty) June 11, 2021
Shetty said,
We go beyond our legal obligations by following Know Your Customer (KYC) and Anti Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required.
Earlier today ED in an official statement said that they have issued a show-cause notice to the crypto exchange regarding an ongoing money-laundering investigation in illegal Chinese online betting app.
The ED claimed Chinese users made use of Wazirx and BINANCE exchange to transfer $12 million into the Wazirx account and transfer out $19 million to the Binance account. The details of these alleged transfers couldn’t be verified by the financial watchdog either on the blockchain or the company’s records. The ED said,
“None of these transactions are available on the blockchain for any audit/investigation”
Wazirx is one of the largest crypto exchanges with over 2 million registered users. The crypto exchange gained a lot of traction this bull season seeing a user growth of upwards of 5,000%.
How Would the Current Investigation Impact Crypto Regulation?
Indian is yet to formalize any laws or regulations around crypto space and existing crypto exchanges are following a self-regulation policy. The Indian Central Bank RBI had issued a circular back in 2018 to impose a banking ban which was later quashed by the Supreme Court in 2020. However, despite the Supreme Court ruling and demand for a formal regulatory policy, the Indian gov is yet to finalize new laws.
Recent reports from inside sources have indicated that the Indian government is looking to classify Bitcoin as an asset class and a formal bill could be tabled in the upcoming monsoon parliamentary session.
