Crypto Exchange WazirX Sees Assets Unfrozen Amid Indian Regulator’s Investigation

India’s Enforcement Directorate (ED) has unfrozen the accounts of crypto exchange WazirX, according to the exchange’s update. 

The exchange’s bank accounts were unfrozen following “active cooperation” with the ED via active anti-money laundering (AML) checks which blocked “suspicious accounts,” read today’s announcement.

The exchange, one of India’s largest with a $2.9 million 24-hour trading volume, has had $8.14 million in assets frozen for more than a month. 

The financial watchdogs accused the exchange of facilitating money laundering “via purchase and transfer of virtual crypto assets.” The ED’s release also stated that 16 fintech companies used WazirX to direct crypto assets to “unknown foreign wallets.”

The financial regulator found during its investigation of the exchange that of the suspected 16 companies allegedly laundering money through WazirX, most accounts had already been blocked between 2020 and 2021. 

Today’s news comes amid an “ongoing money laundering investigation into Chinese-owned illegal online betting Applications,” the regulator said back in June. At that time, the ED issued WazirX with a show-cause notice as part of its investigation. 

The ED stated that “WazirX clients could transfer ‘valuable’ cryptocurrencies to any person irrespective of its location and nationality without any proper documentation whatsoever,” sparking the investigation and further asset freeze.

WazirX has yet to respond to Decrypt’s request for comment at press time.

Regulator cracks down on WazirX, CoinSwitch

The Indian watchdog has been actively investigating money laundering and other fraudulent crypto activity.

CoinSwitch, another Indian crypto exchange backed by the likes of Coinbase and a16z, was accused of violating forex laws and saw five of its locations under investigation in August. 

Indian Crypto Taxes Crush Trade Volumes as Local Exchanges Eye Exodus

Trading volumes across crypto exchanges in India have plummeted after a new transaction tax law was recently enforced. On July 1, 2022, the Indian Government legislated a 1% tax (called TDS, or Tax Deducted at Source) on all crypto-related transactions of more than $126 (10,000 INR). According to this rule, it’s now mandatory for exchanges to deduct 1% of the transactional value from the buyer. That amount should then be paid as taxes to the Government. Following the tax’s implementation last we...

The exchange’s CEO stated that the inquiry into the exchange was “not about money laundering” but about daily Know Your Customer (KYC) operations and procedures for onboarding new users. At the time of press, no updates have been made.