ETtechZanmai Labs, operator of Indian crypto exchange WazirX said it has a no-tolerance policy towards any illegal activities.
The statement comes just days after the Directorate of Enforcement (ED) alleged that the company was in violation of know your customer (KYC) guidelines.
On Friday, ED said it recently conducted searches on one of the directors of Zanmai Lab Pvt Ltd, which owns the popular cryptocurrency exchange WazirX, and had issued a freezing order on its bank accounts that contain Rs 64.67 crore.
“We do not accept any cash transactions. We have fully cooperated with the ED for several days and have responded to all their queries fully and transparently. ED appears to be investigating the transactions of certain users, and Zanmai Labs has no affiliation to such users and is unaware of the purpose of their transactions. Zanmai Labs is in the position of any other intermediary whose platform may have been misused,” it said.
According to the federal agency, WazirX had ‘actively’ assisted 16 fintech companies - under investigation on charges of money laundering - to divert their alleged proceeds of crime using the crypto route. The probe found that the exchange had a complicated ownership structure.
The exchange allegedly violated KYC norms and failed to conduct any enhanced due diligence (EDD) nor raised any suspicious transaction reports (STRs), according to the ED.
An STR is raised to the Financial Intelligence Unit (FIU) when a reporting entity suspects or has reasonable grounds to suspect that funds are proceeds of a criminal activity or are related to terrorist financing.
ED also raised concerns about off-chain transactions between Binance and WazirX.
Also Read | Binance, WazirX ownership row has crypto users in knots
The WazirX spokesperson said that off-chain transactions between WazirX and Binance “can only be done by a user between his/her/its own account on the two platforms.”
Also Read | WazirX looks to allay staff unease over ED action, Binance dispute
“KYC details are available for all off-chain transfers as well (and have been submitted to the ED when requested). Off-chain withdrawals also cannot happen if the accounts are not KYCed. Law Enforcement Agencies (LEAs) can get complete information about the accounts involved in off-chain transfers,” the company said.
On Tuesday, WazirX warned users opting to withdraw their funds to international exchanges that they may “unknowingly be non-compliant” while doing so.
ET reported on August 8 that the recent tussle between WazirX founder and chief executive Nischal Shetty and Binance founder Changpeng Zhao had caused confusion among users, leading some to withdraw funds from the exchange.
The statement comes just days after the Directorate of Enforcement (ED) alleged that the company was in violation of know your customer (KYC) guidelines.
“Users are signed up on WazirX only after they complete the KYC process, including submitting proof of address and identity. Our KYC/AML terms and processes are available on the platform publicly. For every transaction, we are able to produce the KYC details of the relevant user,” a spokesperson said in a statement.
On Friday, ED said it recently conducted searches on one of the directors of Zanmai Lab Pvt Ltd, which owns the popular cryptocurrency exchange WazirX, and had issued a freezing order on its bank accounts that contain Rs 64.67 crore.
“We do not accept any cash transactions. We have fully cooperated with the ED for several days and have responded to all their queries fully and transparently. ED appears to be investigating the transactions of certain users, and Zanmai Labs has no affiliation to such users and is unaware of the purpose of their transactions. Zanmai Labs is in the position of any other intermediary whose platform may have been misused,” it said.
According to the federal agency, WazirX had ‘actively’ assisted 16 fintech companies - under investigation on charges of money laundering - to divert their alleged proceeds of crime using the crypto route. The probe found that the exchange had a complicated ownership structure.
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The exchange allegedly violated KYC norms and failed to conduct any enhanced due diligence (EDD) nor raised any suspicious transaction reports (STRs), according to the ED.
An STR is raised to the Financial Intelligence Unit (FIU) when a reporting entity suspects or has reasonable grounds to suspect that funds are proceeds of a criminal activity or are related to terrorist financing.
ED also raised concerns about off-chain transactions between Binance and WazirX.
Also Read | Binance, WazirX ownership row has crypto users in knots
The WazirX spokesperson said that off-chain transactions between WazirX and Binance “can only be done by a user between his/her/its own account on the two platforms.”
Also Read | WazirX looks to allay staff unease over ED action, Binance dispute
“KYC details are available for all off-chain transfers as well (and have been submitted to the ED when requested). Off-chain withdrawals also cannot happen if the accounts are not KYCed. Law Enforcement Agencies (LEAs) can get complete information about the accounts involved in off-chain transfers,” the company said.
On Tuesday, WazirX warned users opting to withdraw their funds to international exchanges that they may “unknowingly be non-compliant” while doing so.
ET reported on August 8 that the recent tussle between WazirX founder and chief executive Nischal Shetty and Binance founder Changpeng Zhao had caused confusion among users, leading some to withdraw funds from the exchange.
( Originally published on Aug 09, 2022 )
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