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India Freezes Bitcoin at Binance Amid Investigation Involving Crypto Exchange Wazirx

India Freezes Bitcoin at Binance Amid Investigation Involving Crypto Exchange WazirxIndia’s Enforcement Directorate (ED) says it has frozen more than 77.6 bitcoins that were transferred to Binance from Indian crypto exchange Wazirx. The freeze is part of a money laundering investigation into a mobile gaming application. Indian Authority Freezes Bitcoin Held at Crypto Exchange Binance India’s Directorate of Enforcement (ED) announced Wednesday that it has […]

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Stablecoin Economy Continues to Deflate — USDC’s Market Cap Shed $6.7 Billion in 83 Days

Stablecoin Economy Continues to Deflate — USDC’s Market Cap Shed .7 Billion in 83 DaysJust over two months or approximately 83 days ago, the stablecoin usd coin (USDC) had a market valuation of around $55.52 billion and since then, USDC’s market capitalization has lost 12.05%. For most of 2022, the second largest stablecoin by market capitalization, USDC has been above the $50 billion mark, but this week the crypto […]

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Wazirx Plans to Delist 3 Stablecoins, Leftover Balances Will Be Auto-Converted to BUSD

Wazirx Plans to Delist 3 Stablecoins, Leftover Balances Will Be Auto-Converted to BUSDThe crypto asset exchange Wazirx is following Binance’s move by delisting a number of stablecoins and automatically converting them to BUSD at a 1:1 ratio. Wazirx customers have until September 23 to withdraw their stablecoins if they don’t want the funds converted. Wazirx Plans to Drop 3 Stablecoins and Auto-Convert Them to BUSD by October […]

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Indian Authorities Search Crypto Exchange Coinswitch Kuber — CEO Says It’s Not Related to Money Laundering

Indian Authorities Search Crypto Exchange Coinswitch Kuber — CEO Says It’s Not Related to Money LaunderingIndia’s Enforcement Directorate (ED) has conducted searches at five premises linked to popular cryptocurrency trading platform Coinswitch Kuber. The company says its engagement with the ED was not related to any money laundering inquiry. The federal agency recently froze the assets of two other crypto firms, Wazirx and Vauld. Coinswitch Kuber Next on ED’s List […]

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Indian Finance Minister Asks Crypto Investors to Exercise Caution as Authorities Investigate Exchanges

Indian Finance Minister Asks Crypto Investors to Exercise Caution as Authorities Investigate ExchangesIndia’s finance minister has cautioned investors about cryptocurrency as the country’s Enforcement Directorate (ED) investigates a number of crypto exchanges and freezes the assets of some trading platforms. Indian Finance Minister Cautions About Crypto Indian Finance Minister Nirmala Sitharaman reportedly warned about cryptocurrency Saturday at an event organized by the BJP Economic Cell. She cautioned […]

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Binance CEO’s Warning About Wazirx Wallets, Nigerian EFCC on Naira Depreciation, O’Leary Buys the Dip — Bitcoin.com News Week in Review

Binance CEO’s Warning About Wazirx Wallets, Nigerian EFCC on Naira Depreciation, O’Leary Buys the Dip — Bitcoin.com News Week in ReviewAnother week has passed and developments in the Binance-Wazirx controversy continue, Nigeria’s Economic and Financial Crimes Commission (EFCC) claims it has identified individuals fueling the naira’s depreciation, Shark Tank star Kevin O’Leary says crypto “desperately needs policy,” and the government of Nepal is preparing to issue its own digital currency. The weekend is here, and […]

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Binance sides with Indian regulators in WazirX fallout to cease support for off-chain transfers

Binance denied any equity ownership in the India-based crypto exchange after the latter came under regulatory scrutiny.

As reported by local news outlet The Economic Times on Monday, Binance is scheduled to remove off-chain fund transfers with Indian cryptocurrency exchange WazirX on Thursday, although users will still be able to deposit and withdraw balances via the standard withdrawal and deposit process between the two exchanges.

Three days prior, The Directorate of Enforcement of India alleged that WazirX "actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route" and subsequently froze $8.1 million in bank balances related to the exchange. 

Simultaneously, there is an ongoing controversy regarding whether Binance owns the exchange. Last Friday, Changpeng Zhao (CZ), CEO of Binance, said that Binance does not own any equity in WazirX's parent entity Zanmai Labs, and further clarified that a supposed Nov. 21, 2019, acquisition of WazirX by Binance was never completed. 

However, in a tweet dated April 5, 2021, Zhao reposted the following statement from The Financial Express: 

"Binance-owned Indian crypto exchange WazirX crosses $200 million in daily trading volume; eyes $1 billion in 2021."

In a similar post, Nischal Shetty, founder of WazirX, claimed that WazirX was acquired by Binance, with the latter involved in operations such as crypto-to-crypto trading pairs, processing crypto withdrawals, and the like. Furthermore, Shetty alleged that Binance owned the WazirX domain name, had root access to its servers, and controlled all of WazirX's crypto assets and trading profits. 

Binance's CEO CZ has adamantly denied such claims, stating

"Binance only provides wallet services for WazirX as a tech solution. There is also integration using off-chain tx to save on network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals.

WazirX has been embroiled in a number of controversies as of late. Last year, India's Enforcement Directorate was already investigating the exchange due to allegations of Anti-Money Laundering failings. Earlier this year, government officials from the Central GST and Central Excise committee recovered $6.62 million worth of funds from the exchange after detecting GST evasion on trade commissions.

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India Freezes Crypto Exchange Wazirx’s Bank Assets — Binance Claims Acquisition of Wazirx Was ‘Never Completed’

India Freezes Crypto Exchange Wazirx’s Bank Assets — Binance Claims Acquisition of Wazirx Was ‘Never Completed’A major Indian cryptocurrency exchange, Wazirx, has had its bank assets of more than $8 million frozen by the Directorate of Enforcement (ED). The exchange was supposedly acquired by Binance in 2019. However, Binance CEO Changpeng Zhao (CZ) now claims that the acquisition was “never completed.” Wazirx, however, maintains that it was acquired by Binance. […]

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Indian authorities freeze $8.1M in WazirX funds as part of AML investigation

The Directorate of Enforcement of India alleged that WazirX "actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route."

India’s Directorate of Enforcement, or ED, has announced it froze roughly $8.1 million in funds and conducted a search connected to cryptocurrency exchange WazirX as part of an investigation into instant personal loan fraud.

In a Friday announcement, the Directorate of Enforcement alleged WazirX facilitated transactions by unnamed fintech firms “to purchase crypto assets and then launder them abroad” as part of a scheme involving Chinese-backed companies circumventing India’s licensing regulations. In its investigation, the ED said it ordered WazirX bank accounts containing 646.7 million Indian rupees — roughly $8.1 million at the time of publication — frozen and conducted a search connected to co-founder Sameer Mhatre.

According to the regulator, the investigation was still ongoing. However, the ED claimed the crypto exchange had “lax KYC norms” and “loose regulatory control” of transactions between WazirX and Binance, and did not record information needed to verify from where funds were coming to purchase crypto used in the alleged fraud.

“Despite giving repeated opportunities, WazirX failed to give the crypto transactions of the suspect fintech APP companies and reveal the KYC of the wallets,” said the ED, adding:

“WazirX is not able to give any account for the missing crypto assets. It has made no efforts to trace these crypto assets. By encouraging obscurity and having lax AML norms, it has actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route.”

In a Friday Twitter thread, Binance CEO Changpeng Zhao said the firm did "not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders." He added that "Binance only provides wallet services for WazirX as a tech solution," while WazirX was responsible for KYC and other operations on the exchange. 

Related: Indian regulator probes crypto exchange for alleged forex law violations

With the exodus of many crypto firms in China following a regulatory crackdown, many companies have reportedly turned to the markets in India. The ED reported that some fintech firms “backed by Chinese funds” had “piggybacked” on Indian companies with defunct non-banking financial company licences to offer lending services to residents.

The ED took similar action against WazirX in June 2021, ordering the crypto exchange to show cause related to transactions of a money-laundering investigation into illegal online betting applications involving Chinese nationals. WazirX director Nischal Shetty said at the time that the exchange went “beyond [its] legal obligations by following Know Your Customer (KYC) and Anti Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required.”

Cointelegraph reached out to WazirX, but did not receive a response at the time of publication.

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