India’s leading cryptocurrency exchange backed by Binance is undergoing legal review | Editorial by Blockonomist | Capital | June 2021

WazirX seems to be in trouble because ED has issued a Show Cause Notice to its M/s Zanmai Labs Pvt Ltd. WazirX is indeed India’s leading cryptocurrency trading platform, allowing customers to conduct cryptocurrency transactions.

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A kind Although director Nischal Shetty denied that any notice had been issued, it must have been issued by the foreign exchange management company for continuous money laundering of INR 2,790.74 crore. On June 11, 2021, the official Twitter account of the Law Enforcement Bureau disclosed the news.

Image source: Twitter

WazirX denies all allegations that it has received any notice from ED showing the reason. In addition, their Twitter users stated that WazirX has been providing all the information to the authorities.

Image source: Twitter

So, does this mean that WazirX P2P is regulated? Are you not involved in money laundering? Let’s explore it. First of all, if you don’t know what WazirX P2P is, then I tell you that it allows users to buy and sell USDT directly with other sellers and buyers. Here, P2P means “person to person”.

Earlier, on May 20, 2021, WazirX disabled its Paytm account. Since then, WazirX P2P has become a common model for buying and selling USDT using Indian Rupees (INR). Well, this is mainly because the Paytm payment bank stopped cryptocurrency transactions.

WazirX P2P works by matching a person who wants to sell USDT in fiat currency with another person who wants to buy USDT in exchange for fiat currency. In this way, the buyer uses UPI to transfer funds to the seller’s account, and WazirX provides USDT to the buyer after the seller confirms the payment. It seems easy, right?

However, recently, it was accused of laundering money worth 279.074 crore through illegal online gambling apps owned by China. Online gambling or betting is a type of gambling conducted on the Internet through various applications (including games).

It has been discovered that Chinese citizens exchange money laundered INR into USDT and then transfer it to Binance wallet.

It is worth noting that Article 3 of the Foreign Exchange Administration Law stipulates that individuals shall not engage in foreign exchange transactions. The Central Government has established an Enforcement Agency (ED) to investigate entities that violate FEMA rules.

You can learn more about FEMA here

WazirX can be correctly marked as unregulated because it does not even collect the required mandatory documents, which violates the FEM guidelines. The platform has transferred 140 billion rupees worth of cryptocurrency to the Binance account and received 8.8 billion rupees worth of cryptocurrency from the Binance account. The point is that these transactions cannot be investigated on the blockchain.


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