While Binance deals with immense pressure from regulators across the globe, an Indian crypto exchange acquired by Changpeng Zhao’s crypto platform has found itself in troubled waters with the country’s financial regulator.
Binance went on to explore and expand its services across the globe. Not very long ago, the platform was interested in one of India’s prominent crypto exchanges, WazirX. Soon after this, Binance acquired the Indian crypto platform even though the crypto scene in the country wasn’t very clear. While the status quo of crypto in India remains hazy, the country’s, Directorate of Enforcement [ED] called out WazirX for violating the Foreign Exchange Management Act.
Indian crypto exchange called out for infringing forex laws
India’s financial regulator Directorate of Enforcement [ED] issued a notice to WazirX for carrying out transactions worth $372 million or 2,790.74 crore rupees involved in violating specific forex laws. The Economic Times revealed that the Indian crypto platform was investigated for initiating cross-border payments without any government /regulatory oversight.
Addressing the same, an official from the ED told the news portal,
“These were carried out in violation of forex rules. WazirX’s platform allowed clients to transfer cryptocurrencies without proper documentation, making it a route for laundering. [..] Since money has crossed borders, the law of the land applies and one needs to be sure that this money isn’t cheap money (cheap money is a low-interest loan) or dirty money (used for illegal activities).”
Even though WazirX has robust KYC and AML processes, the ED official suggested that they weren’t enough to make certain digital assets weren’t being misused.
The entire crypto-verse fought long and hard to steer away from its association with the dark web. Once again linking Bitcoin to the dark web, the ED official added,
“In the absence of any official digital currency and regulation, there have been instances of Bitcoins being used to buy drugs on the dark net as well as for money laundering.”
As Indian crypto platforms have been working with the government to formulate better laws/ regulations for the industry, the latest news could hinder the progress.