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