India’s Enforcement Directorate Freezes Crypto Platform WazirX’s Assets
India’s Federal Enforcement Directorate (ED) has now released WazirX’s assets to crypto exchange. Last year, the ED conducted an investigation into the crypto platform as it suspected violations of foreign exchange rules.
Following the investigation, the ED froze assets worth $8.16 million, or INR 646.70 million.
This is finally good news for WazirX after the ED froze the exchange’s assets last month in connection with an ongoing investigation into malpractice related to lending and short-term loan apps.
Around 16 fintech companies were surveyed that had used the WazirX platform.
In a blog post, the crypto exchange mentioned,
After a thorough internal investigation, WazirX noticed that most of the users whose information was sought by ED were already identified as suspicious by WazirX internally and were blocked in 2020-2021,” the company said in a blog.
Now that the investigations have concluded, WazirX will be able to resume banking as usual.
Crypto exchange WazirX partnered with ED
The crypto exchange maintained from the beginning of this investigation that it had cooperated with the investigators.
WazirX mentioned that it had provided all necessary details, information and documents of the alleged accused companies operating on the platform.
The investigation by the ED has caused a massive setback for WazirX, which is an Indian company. This has also caused Binance to almost reject WazirX.
During the investigation, Binance CEO Changpeng Zhao dismissed WazirX. ED had frozen WazirX’s assets then. The agreement between Binance and WazirX was supposed to be concluded in 2019.
The news of acquiring WazirX in 2019 was announced by Zhao. However, after the fiasco with ED, Binance mentioned that the transaction was never completed.
WazirX’s founder, Nischal Shetty, has repeatedly stated that WazirX was actually acquired by Binance.
The hostility between WazirX and Binance
The hostility has prompted WazirX and Binance to exchange heated tweets between co-founders Nischal Shetty and Changpeng Zhao last month.
After this, Binance closed the off-chain transfer channel between WazirX and Binance. These off-chain fund transfers are primarily transactions that take place outside the blockchain network.
The reason why off-chain transactions are popular is that there is far less gas tax involved, and it also involves zero-low costs.
The blog post by WazirX said,
The Enforcement Directorate (ED) has conducted investigations into 16 fintech companies and instant loan apps. Some of them happened to be using the WazirX platform. WazirX has cooperated with the investigators by providing them with all necessary details, information and documents about the alleged accused companies that used the WazirX platform
Recently, the ED has raided many fintech companies in relation to the increased threat posed by Chinese loan apps.
The rise in digital lending from unregistered and fraudulent apps has created major concerns across the Indian government. Reserve Bank of Indian and ED are constantly on the lookout for such companies.
