Minister of State for Finance Pankaj Choudhary said on Tuesday that the Enforcement Directorate is probing alleged money laundering of Rs 2,790 crore through crypto exchange WazirX.
The ED is probing two crypto-currency-related cases against WazirX under the provisions of the Foreign Exchange Management Act, 1999 (FEMA), he said in a written reply to the Rajya Sabha.
“In one case, the investigation conducted so far revealed that Wazirx, an Indian crypto-exchange platform operated by Zanmai Labs Pvt Ltd in India, was using the boundary wall infrastructure of Cayman Islands based exchange Binance. It has been found that not all crypto transactions between these two exchanges were being recorded on the blockchain and thus were wrapped in mystery,” he said.
Accordingly, he said, a Show Cause Notice (SCN) has been issued against VexirX under the provisions of FEMA for allowing outward remittance of crypto assets worth Rs 2,790 crore to an undisclosed wallet.
Furthermore, in another case, it has been observed that Indian exchanges WazirX have been able to process requests from foreign users to convert one crypto to another on their platform as well as by using transfers from third party exchanges like FTX, Binance, etc. Is allowed. Told.
Responding to another question, Choudhary said that cryptocurrencies and non-fungible tokens (NFTs) are borderless by definition and international cooperation is needed to prevent regulatory arbitrage.
Therefore, any law to regulate or ban occupation and trade in such borderless territory can be effective only after significant international cooperation on assessment of risks and benefits and development of common classifications and standards, he said.