India's financial regulator ED: Money laundering on WazirX and Binance exchanges

Update on July 30, 2021:

Bloomberg reported that India's anti-money laundering agency is investigating whether the largest cryptocurrency exchange, Binance, is linked to money laundering activity conducted through local betting apps.

India investigates Binance and Chinese betting apps: According to the article, Binance executives will be questioned by the Enforcement Directorate. Indian authorities are currently investigating whether Chinese mobile betting apps work in India. These apps have raised more than $134 million in rupees in the past ten months, and some of that money has been laundered through a major local cryptocurrency exchange, WazirX. The exchange was bought by Binance two years ago and Binance Holdings Ltd. has been under investigation for some time:

The Chinese betting app operators in India are currently under investigation for raising more than 10 billion rupees ($134 million) in 10 months. They allegedly laundered some of the money through the cryptocurrency exchange WazirX, which Binance acquired in 2019. The app operators allegedly used WazirX wallets to buy, convert and transfer money to Binance wallets. Indian law enforcement attention to WazirX had previously been known, but now Binance's own management has also been summoned for questioning. Authorities have found that in most cases, Binance has not collected the necessary identification information in accordance with the recommendations of the Financial Action Task Force on Money Laundering (FATF).

Material from June 11, 2021:

The Enforcement Directorate (ED) issued a warning June 11 for cryptocurrency exchange WazirX and its directors Nishal Shetty and Samir Mkhatre, relying on the Foreign Exchange Management Act (FEMA).

ED initiated a FEMA investigation into money laundering through "illegal" online betting apps owned by the Chinese, the agency said in a statement.

WazirX is an Indian cryptocurrency exchange that acts as a platform for trading various digital currencies. Law enforcement authorities said that the accused Chinese nationals laundered the proceeds of crime by converting deposits from Indian rupees into the cryptocurrency Tether and then transferring them to Binance.

It is worth adding that the cryptocurrency exchange WazirX in one way or another belongs to the offshore casino Binance, this is not a minor fact in the money laundering investigation.

"WazirX fails to collect the necessary documentation, in clear violation of basic mandatory anti-money laundering (AML) and counterterrorist financing (CFT) regulations and FEMA guidelines," the agency said in a statement.

"WazirX customers were found to be able to transfer 'valuable' cryptocurrencies to anyone, regardless of location or nationality, without any proper documentation, making it a safe haven for users with criminal intentions," ED added.

In its May 31 clarification, the Reserve Bank of India (RBI) highlighted certain provisions of the law, asking banks to be careful. RBI has asked banks to conduct the requisite due diligence process on customers in accordance with regulations governing Know Your Customer (KYC) standards, AML, CFT and obligations of regulated entities under the Prevention of Money Laundering Act (PMLA) 2002.

Banks should also ensure compliance with relevant FEMA regulations in relation to overseas remittances, RBI said.

31.07.21

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