Bank a/cs of WazirX director frozen under PMLA following raid

economictimes.indiatimes.com:

money laundering case. The Enforcement Directorate (ED) Friday said that it recently conducted searches on one of the directors of M/s Zanmai Lab Pvt Ltd which owns the popular crypto-currency exchange WazirX and has issued a freezing order to freeze their bank balances to the tune of Rs. 64.67 crores.

According to the agency,the exchange has ‘actively’ assisted around 16 fintech companies under investigation on charges of money laundering to divert their alleged proceeds of crime using the crypto route. The agency probe has found that the exchange has a complicated ownership structure making it ‘obscure’. The exchange was in alleged violation of KYC norms and has failed to conduct any enhanced due diligence (EDD) nor has raised any suspicious transaction reports (STRs).

A STR is raised to the financial intelligence unit (FIU) when a reporting entity suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing,. The probe has found that most of the transactions on the exchange were not recorded on the blockchain also. WazirX had earlier informed investigators that prior to July 2020, they did not even record the details of the bank account from which funds were coming into the exchange to purchase crypto assets.

No physical address verification was done. There is no check on the source of funds of their clients. The agency’s statement comes days after the minister for state (Finance) Pankaj Chaudhary told the Parliament that WazirX was being probed under money laundering.