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India’s Enforcement Directorate Unfreezes Crypto Platform WazirX’s Assets

12 Sep, 20223 min readOther
India’s Enforcement Directorate Unfreezes Crypto Platform WazirX’s Assets

India’s federal Enforcement Directorate (ED) has now unfrozen crypto exchange WazirX’s assets. Last year, ED undertook an investigation into the crypto platform as it suspected violations of foreign exchange regulations.

Following the investigation, the ED froze assets worth $8.16 million, or 646.70 million INR.

This is finally good news for WazirX after ED froze the exchange’s assets last month in relation to an ongoing investigation regarding malpractices related to loan apps and apps that provide short-term loans.

Around 16 fintech companies came under investigation who had used the WazirX platform.

In a blog post, the crypto exchange mentioned,

After an in-depth 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 its banking operations as usual.

Crypto Exchange WazirX Cooperated 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 the required details, information, and documents of those alleged accused companies that operated on the platform.

The investigation by the ED has caused a massive setback to WazirX, which is an Indian company. This has also caused Binance to virtually repudiate WazirX.

During the investigation, Binance CEO Changpeng Zhao disowned WazirX. The ED had frozen WazirX’s assets by then. The deal between Binance and WazirX was supposed to be concluded in the year 2019.

The news of acquiring WazirX in 2019 was announced by Zhao. However, after the fiasco with the ED, Binance mentioned that the transaction was never completed.

WazirX’s founder, Nischal Shetty, has repeated time and again that WazirX was indeed acquired by Binance.

The Hostility Between WazirX And Binance

The hostility has caused WazirX and Binance to exchange heated tweets between co-founder Nischal Shetty and Changpeng Zhao last month.

Following this, Binance closed off the off-chain fund transfer channel between WazirX and Binance. These off-chain fund transfers are primarily transactions that take place outside of the blockchain network.

The reason why off-chain transactions are popular is that there is far less gas fee involved and it also involves zero-low cost.

The blog post by WazirX stated,

The Enforcement Directorate (ED) has been conducting investigations of 16 fintech companies and instant loan apps. Some out of them have happened to use the WazirX platform. WazirX has been cooperating with the investigators by providing them with all the necessary details, information, and documents of the alleged accused companies who used the WazirX platform

Recently, the ED has raided a lot of fintech companies in relation to the increased menace caused by Chinese loan apps.

The increase in digital lending by unregistered and fraudulent apps has caused major concerns across the Indian government. The Reserve Bank of India and ED are constantly on the hunt for such companies.

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