India freezes BRL 42 million from Binance cryptocurrency exchange

An Indian authority, the Directorate of Enforcement (ED) has frozen BRL 42 million in assets of a brokerage owned by Binance and was the largest cryptocurrency operation in the country. The action came after an investigation into the platform, which reportedly pointed to a possible “offline” legal action.

One of the operation’s directors has been raided and his bank accounts frozen in what could be one of the biggest actions against a brokerage in the country in recent years.

It is important to remember that the relationship of India with cryptocurrencies is not the bestand between the comings and goings, the new action can have hard dismemberments for the local community.

Following the news, Binance said it does not own the WazirX platform, despite disclosing the acquisition in 2020.

Changpeng Zhao, founder and CEO of Binance, said he has yet to finalize the transaction, citing “a few issues” which he declined to detail.

Binance announced the acquisition of WazirX in late 2019 in a blog post. The official blog post, which featured a photo of the founders of Zhao and WazirX, also showed the Binance executive’s enthusiasm for the deal.

India freezes BRL 42 million in exchange owned by Binance

Owned by Binance Holdings, WazirX is now one of the largest exchanges operating cryptocurrencies in India.

But this Friday (5), the local government, through ED, blocked 42 million BRL from the exchange which is owned by Binance in India.

“The Board of Enforcement (ED) has investigated one of the directors of M/s Zanmai Lab Pvt Ltd, which owns popular cryptocurrency exchange WazirX, and issued a freezing order to freeze his bank balances amounting to INR 64.67 Crore.”

According to the Indian agency, several fintechs in the country are under investigation by the local government, which has seen nebulous situations arise in its financial system, mainly with the practice of money laundering.

ED said China-backed companies have been barred from operating in the country in recent years, seeking new avenues to establish operations. Part of how it works is buying cryptocurrencies to escape the country’s money, using platforms like WazirX, for example.

Investigating the operation, the authorities realized that the office is practically virtual and operates in coworking with only two chairs, in addition to an email which rarely responds to requests.

WazirX is powered by cloud-based software (@AWS Mumbai), all employees work from home, the head office is a 2-chair Wework coworking space, and all crypto-to-crypto transactions are handled by Binance {which still once has no known office information, any known employees, and rarely responds to inquiries at legal@binance.com}.”

At least 16 illegal fintechs may have laundered money on Binance exchange, official says

After the investigation went to the Binance director’s home last Wednesday (3), they discovered new elements. According use ED official, India official, the Binance-owned exchange has a weak AML policy, which has allowed 16 fintechs to launder money.

“By encouraging obscurity and having lax AML regulations, he has actively aided approximately 16 fintech companies accused of laundering criminal proceeds using the cryptocurrency route. Hence, an equivalent movable asset worth Rs. 64.67 Crore coated with WazirX was frozen under PMLA, 2002”

Binance has yet to publicly comment on the India deal as of this writing. Additionally, WazirX is also remaining silent on the matter until Friday afternoon.

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