SUMMARY
The Enforcement Directorate has frozen the bank assets in connection with a money laundering case
Earlier this week, Finance Minister Nirmala Sitharaman informed the Rajya Sabha that the ED is investigating two cases against WazirX
Crypto exchanges are under the scrutiny of the government in the country, with the Income Tax Department and GST Commissionerate also probing some of them
The Enforcement Directorate (ED) has frozen cryptocurrency exchange WazirX’s bank assets worth INR 64.67 Cr in connection with a money laundering case.
“ED searches the Director of WazirX Crypto-Currency Exchange & freezes its Bank assets worth Rs 64.67 Crore for assisting accused Instant Loan APP Companies in laundering of fraud money via purchase & transfer of virtual crypto assets,” the ED said in a tweet.
Earlier this week, Finance Minister Nirmala Sitharaman informed Rajya Sabha that the ED was investigating two cases against WazirX under the Foreign Exchange Management Act (FEMA) provisions.
WazirX used the walled infrastructure of Cayman Island-based exchange BINANCE, and the crypto transactions between these two exchanges were not even being recorded on the blockchains, Sitharaman added.
In another case, the crypto exchange allowed foreign users’ request to convert one crypto into another on its own platform by using transfers from third-party exchanges namely FTX, and BINANCE, among others, the finance minister informed.
Minister of State for Finance Pankaj Chaudhary also informed Rajya Sabha that the ED had served WazirX a notice under the FEMA Act.
It must be noted that the ED last month reportedly found that the top exchanges did not comply with the know-your-customer (KYC) regulations and anti-money laundering (AML) norms properly.
Other than the ED, crypto exchanges are also being probed by the Income Tax Department and the GST Commissionerate, industry sources said earlier.
The development comes at a time when the crypto industry is reeling under a crypto winter, and is under the scrutiny of the government as well as the Reserve Bank of India (RBI).
The government has also introduced a tax of 30% on income from crypto investments and 1% TDS on crypto transactions.
During the ongoing Monsoon session of the Parliament, the finance minister also informed that the RBI is of the opinion that cryptocurrencies should be banned.
“In view of the concerns expressed by the RBI on the destabilising effect of cryptocurrencies on the monetary and fiscal stability of a country, the RBI has recommended framing of legislation on this sector. The RBI is of the view that cryptocurrencies should be prohibited,” she said.
