WazirX provided the Compliance Board with a Show Cause Notice for cryptocurrency transactions worth Rs. 2,790 million

In 1999, WazirX, India’s leading cryptocurrency exchange, received a notice from the Bureau of Enforcement (ED) certifying the reason, which violated FEMA, a cryptocurrency transaction worth rupee in 1999. 2,790.74 million, the law enforcement agency shared in a tweet on Friday. The law enforcement agency added in a press release that Chinese citizens had used cryptocurrency exchanges to launder money. WazirX is an Indian cryptocurrency exchange launched in India in 2018. Users can go to WazirX to buy and sell Bitcoin and other cryptocurrencies while spending in rupees. 

Although the state of cryptocurrencies in India has changed for some time, people are very interested in these tokens as an investment option. However, cryptocurrencies have also been used for illegal payments in the past, including the infamous payment past. The dark web, because it is more difficult to track the flow of funds through cryptocurrencies. In a tweet released by ED, the agency stated: “ED has issued a notice of proof to the WazirX cryptocurrency exchange for violating FEMA, involving transactions in cryptocurrencies worth 2,790.74 crores in 1999.” 

In response from When inquired by Gadgets 360, WazirX responded that it had not received notification of the reason for the show. He also denied any violations by the company. “WazirX complies with all applicable laws. We exceed our legal obligations by following the Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, and always provide information to law enforcement agencies when necessary. We can track all this information WazirX Chief Executive officer and founder Nischal Shetty said in an email statement that if we receive formal communication or notification from the emergency department, we will fully cooperate with the investigation.”

“Funds are safe on WazirX, there is no need to worry about funding,” he added. FEMA is the Foreign Exchange Administration Act of 1999, which aims to “consolidate and modify foreign exchange laws to promote foreign trade and payments, and promote the orderly development and maintenance of the Indian foreign exchange market.” According to the ED press release, the presentation reason notice (SCN) has been sent to the directors of M/s Zanmani Labs Pvt Ltd (WazirX). 

ED began investigating the money laundering of illegal online gambling apps owned by Chinese people and accused these Chinese people of money laundering. 570 million purchased Tether cryptocurrency through WazirX. “During the investigation, the accused Chinese citizen was found to have laundered approximately 570 million rupees by converting Indian rupee deposits into cryptocurrency Tether (USDT) and then transferring them to Binance (the Cayman Islands-registered exchange). The proceeds of the crime.) 

The wallet is in accordance with foreign instructions,” the statement said. “WazirX customers were found to be able to transfer “valuable” cryptocurrency to anyone, regardless of their location and nationality, without any proper documentation, making it a safe haven for users seeking money laundering/other illegal activities,” he added Say.

Are Bitcoin and cryptocurrencies legal in India? 

Earlier this month, the Reserve Bank of India (RBI) asked Indian banks not to refer to its 2018 cryptocurrency announcement. In 2018, the Reserve Bank of India asked banks not to trade virtual currencies. However, last year in 2020, the Supreme Court crushed this ban, so in June, the Reserve Bank of India issued a new order requiring banks to stop using the 2018 notice. 

The Reserve Bank of India stated that banks and other financial entities must still conduct due diligence procedures in accordance with Know Your Customer (KYC), Anti-Money Laundering (AML), and Anti-Terrorism Financing Standards. (CFT) and regulated entities’ obligations under the Prevention of Money Laundering Act (PMLA), in addition to ensuring compliance with FEMA’s regulations on overseas remittances. 

TechArt Chief Analyst Faisal Kawoosa said: “Cryptocurrency has become a reality. We cannot deny it. It is great to see India get involved in this field soon. What is worrying, however, is the ambiguity surrounding its legitimacy. I think we must have a clear vision in this area so that everyone has the confidence to grow and benefit from it.” 

With this latest development, the regulatory stance surrounding cryptocurrencies seems a bit confusing, because cryptocurrencies can be traded internationally. Without too much difficulty, this may cause trouble for companies trying to keep records in India.

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