ED raid on WazirX crypto exchange – Sangri Today

Manager’s bank assets worth Rs 64 crore frozen, helped Chinese loan app send money overseas

The Enforcement Directorate (ED) froze bank assets worth Rs 64.67 crore of Sameer Mhatre, a director of Zanmai Lab Pvt Ltd. The WazirX crypto exchange is owned by Zanmai Lab. The ED took this action after raiding the director’s premises.
The ED is investigating money laundering cases against several Indian Non-Banking Financial Companies (NBCCs) and their fintech partners. They are accused of breaching RBI guidelines, misusing personal data and speaking in abusive language with clients for loan collection.
The agency said many Chinese-backed fintech firms could not obtain NBFC licenses to do loan business. They therefore entered into a memorandum of understanding with their NBFC which is not functional.
After criminal investigations began, many of these fintech apps shut down their businesses and embezzled the huge profits they had made. The ED found that fintech companies were buying crypto assets from the fund in large quantities and then diverting them to launder them overseas.
ED had issued summonses to crypto exchanges. The ED said it was observed that the maximum amount was remitted to the WazirX exchange and the purchased cryptoassets were remitted to an undisclosed foreign wallet.
The ED stated that Sameer Mhatre had full remote access to WazirX’s database, but despite this, he did not provide any details related to the crypto asset. The Ministry of Finance had told the Rajya Sabha on August 2 that the ED was investigating WazirX under the Foreign Exchange Management Act (FEMA).

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