The Enforcement Directorate of India is looking into ten crypto exchanges for allegedly laundering more than $125 million in cryptocurrency.
Ten crypto exchanges are being investigated by India’s Enforcement Directorate for allegedly laundering more than 1 billion rupees. This is more than $125 million in digital money equivalent.
According to The Economics Times, numerous organizations suspected of money laundering utilized the exchanges to acquire cryptocurrencies worth more than 100 million rupees, which were subsequently transferred to other foreign wallets, most of which were connected to mainland China.
Crypto Exchange has poor user activity monitoring.
The sources said that the monitored accounts belonged to persons who lived in far-off places “with no link to the transactions,” and that the cryptocurrency exchanges acquired KYC data of questionable origin.
The crypto exchanges, although not generating any suspicious transaction reports (STRs) that may have revealed information about alleged money laundering, asserted that they were in line with KYC laws.
According to people familiar with the inquiry, this made it more difficult to track down the account, which after being made aware of the investigation, proceeded to remove its cash and log out.
“Once these firms learned that they were under the scanner, they shut shop and used the crypto route to siphon the funds abroad. The opaque nature of the crypto ecosystem and the industry not being regulated provided the requisite cover for these firms to park their assets offshore”
Binance and WazirX Crypto Exchange are being pursued by India
According to a recent report, the ED is targeting Binance and WazirX after multiple Twitter fights between the CEOs of the two firms over ownership and WazirX’s regulatory non-compliance.
Following the conflict between the two businesses, the ED blocked WazirX’s bank accounts which held more than $8 million, on the grounds that the exchange had “actively” helped more than 15 fintech firms with their money laundering.
In response, Binance said that they expect WazirX to “take full responsibility for its operations and users’ cash,” highlighting the fact that WazirX has no connection to the operations of the major crypto exchanges.
According to a business executive who spoke to the Economic Times, the exchanges are the second point of failure in these crimes, despite the fact that the ED is looking into a number of crypto exchanges for money laundering.
As conventional banks are the main conduits for the flow of cash in and out, the crypto exchanges did little to nothing to track down the funds, which is why “it wasn’t detected at the banking level.”
