India is investigating 10 crypto exchanges for laundering more than $125 million

India’s Enforcement Directorate i.e. ED is conducting an investigation against ten cryptocurrency exchanges. It is known that these exchanges are allegedly involved in laundering more than 1 billion rupees i.e. equivalent to more than $125 million in digital currency.

india-crypto-exchange-investigation-wazirx
Binance and WazirX

According to reports, the exchanges which have not yet been determined were used by several companies charged with money laundering to make cryptocurrency acquisitions of more than 100 million rupees that were then sent to other international wallets, mainly linked to mainland China.

Exchanges Had a Poor Management of Their Users’ Activity

In addition, the sources noted that the exchanges collected KYC data of doubtful provenance, as the tracked accounts belonged to people living in remote areas with no connection to the transactions.

However, the exchanges reasoned that they were in compliance with KYC regulations, despite not producing any Suspicious transaction reports (STRs) that could have yielded any information about suspected money laundering.

Therefore, the failure to comply with the measures required by regulators made it more difficult to trace the account, which upon learning of the investigation, proceeded to withdraw its funds and log off – as per the sources close to the investigation.

Also read, SEC to investigate all crypto exchanges

Binance & WazirX Crypto Exchange In Crosshairs

Binance and WazirX are in the ED’s crosshairs, following several Twitter conflicts between the CEOs of both companies over ownership and regulatory non-compliance by WazirX.

Following the two companies’ dispute, the ED froze WazirX’s bank accounts holding more than $8 million, alleging that the exchange had actively assisted in the money laundering of more than 15 fintech companies.

For its part, Binance said in response that they hope WazirX will take full responsibility for its operations and users’ funds, stressing that the global crypto exchanges have nothing to do with WazirX’s procedures.

Although the ED is investigating several exchanges for money laundering, according to an industry executive, the exchanges are the second point of failure in these crimes, as the money goes in and out mostly from traditional banks which also did little to nothing to trace the funds, which is why it wasn’t noticed at the banking level.


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