ED unfroze our accounts, WazirX says; banking ops to resume

The Enforcement Directorate unfroze the bank accounts of cryptocurrency exchange WazirX, the firm announced in an update on its website. “Due to the active cooperation extended by WazirX and active Anti-money laundering (AML) checks that led to the blocking of suspicious accounts, ED has unfrozen the bank accounts of WazirX. WazirX is now in a position to continue its banking operations as usual,” the firm said. 

Sixteen fintech companies who were using WazirX were under investigation, and the exchange said it had already frozen their accounts after detecting suspicious activity on their part in 2020–21. The Enforcement Directorate had frozen assets worth Rs 64.67 crores in August. These fintechs were Chinese-controlled digital lenders, the ED had said.

In a press release at that time, the agency complained that WazirX’s company registrations were obscuring its ownership, and that its office was just a “2 chair” coworking space, with most employees working from home. Binance, which owns WazirX, rarely replied to legal requests sent to them, the agency further said, adding that WazirX was not providing the agency with suspicious transaction details.

“By encouraging obscurity and having lax AML norms, it has actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route,” the ED had then said. 

WazirX then denied the agency’s claims, saying it did not agree with the press release’s claims, and that it was cooperating with the authorities. Even though this is a relief for the company, WazirX is still beset by problems, not the least of which is the crypto winter, which has hit most players in the space. 

In April, the exchange’s co-founders Nishchal Shetty and Siddharth Menon shifted their base to Dubai, amid increasing scrutiny on the crypto space in India, Business Today reported. Over the last year, the government has indicated that the RBI would like to ban private cryptocurrencies in India, but that it would wait for the global regulatory environment of crypto to evolve further before proceeding with newer regulations.