Is the exchange responsible for fraud related to cryptocurrency? | Author: Dwayne D’cunha | The Capital | June 2021


WazirX is India’s largest cryptocurrency exchange and one of the first exchanges to support the use of cryptocurrencies and require the government to properly supervise them. This in turn paints the company’s bright prospects as a supporter of decentralized finance and all its myriad benefits.

However, WazirX was not clear until it discovered whether the notorious Indian exchange was willing or unwilling to contribute to drug smuggling.

After announcing a money laundering plan involving the aforementioned exchange, it has been on the watch list of the ED (Bureau of Enforcement). The specific allegations they said involved the transfer of 279 billion rupees ($380 million) worth of cryptocurrency to illegal Chinese online gambling apps. China’s recent crackdown on Bitcoin has also largely contributed to illegal methods of acquiring cryptocurrency. WazirX is not the only major exchange involved, because Binance wallets are also used to store these illegally obtained tokens.

Presumably, the ED has notified WazirX of the reason for the show, which will require them to prove their actions are reasonable. However, founder Nischal Shetty denied providing any such notice to the company. The inconsistency of information transmission between the two has always been a worrying issue.

Even less than 2 weeks after the money laundering allegations were made, a new case involving WazirX and the underground drug circuit occurred. The main culprit behind this racket is Makarand Pardeep Adivirkar, who is also known as the “King of Cryptocurrency”, who pays Bitcoins to dealers in European countries through the dark web. Blockchain technology certainly has privacy advantages and can be used to incite such behavior. Fortunately, the incident was exposed due to the Narcotics Control Board (NCB) department in Mumbai, and the man has been put in prison.

According to WazirX, they enforce strict KYC (Know Your Customer) compliance and ensure that this person is not a user of their services. Although they did not provide any definite evidence to support their claims.

There are not so many cryptocurrency exchanges in India because it has only recently been adopted, and the fact that WazirX is the main exchange acquired by Binance raises a valid question as to why such people would use the services of well-known companies. If this is confirmed, it will seriously jeopardize the legitimacy of cryptocurrency exchanges that have been looked down upon.


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