India’s WazirX says it has no-tolerance policy on illegal activities

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Zanmai Labs Private Limited, the firm operating Indian cryptocurrency exchange WazirX, said Tuesday it has a no-tolerance policy towards any “illegal activities”. Users agree to use the exchange in accordance with applicable laws, the company said in a statement.

See related article: Tax authorities recover US$9M from India’s biggest crypto exchanges

Fast facts

  • WazirX, one of India’s largest cryptocurrency exchanges by volume, has been under regulatory scrutiny since India’s Directorate of Enforcement (ED) started investigating cases of alleged foreign exchange violations.

  • “ED appears to be investigating the transactions of certain users and Zanmai Labs has no affiliation to such users and is unaware about the purpose of their transactions,” the company said in its statement.  “For every transaction, we are able to produce the KYC (know-your-customer) details of the relevant user. We do not accept any cash transactions.”

  • WazirX said KYC details are available for all off-chain transfers as well and the law enforcement agencies can get complete information about the accounts involved in off-chain transfers.

  • WazirX, which reportedly has about 15 million users, was said to have been acquired by Binance in 2019. However, Binance founder and CEO Changpeng Zhao, in a series of Tweets, said the transaction was never completed.

  • “Binance has never — at any point — owned any shares of Zanmai Labs, the entity operating WazirX,” Zhao said, kicking off a wave of accusations and denials between the two exchanges.

  • This is not the first time that India’s ED is questioning WazirX. It had issued a so-called show cause notice to WazirX in June 2021 for alleged foreign exchange violations involving about US$382 million.

  • The ED last month reportedly contacted Indian crypto exchanges, including CoinDCX and CoinSwitch, to probe possible violations of foreign exchange rules.

See related article:  Only the big fish will survive as India cracks the whip on crypto: Binance-backed WazirX