The regulatory watchdog has issued a warning against India’s largest crypto exchange WazirX, the notice poses a significant challenge to the Indian crypto ecosystem.
This bull season, India’s regulatory quandary has taken multiple twists and turns. First, there were speculations of a crypto bill being introduced during the forthcoming parliament session; however, the crypto bill was not included in the 17 bills scheduled for the monsoon session.
According to a report in ET, India’s regulatory watchdog Enforcement Directorate (ED) filed a notice to WazirX, the country’s largest crypto exchange, asking why withdrawals from the crypto wallet are not a violation of India’s Foreign Exchange Management Act (FEMA).
The banking watchdog’s letter comes at a critical stage in India’s crypto regulatory compliance. The notice inquiring about the legality of cryptocurrency withdrawals from one wallet to another might be a major roadblock for Indian crypto exchanges.
Previously, crypto exchanges in India were struggling owing to banks’ refusal to give their services, and the recent notification is likely to exacerbate the country’s crypto service providers’ troubles.
The recent ED notification to WazirX comes barely a month after the regulatory agency sent the crypto exchange another notice about a money-laundering scandal involving a Chinese betting ring.
The ED’s notice to WazirX poses a significant challenge to the crypto ecosystem since it raises concerns about the legality of crypto transfers from one wallet to another.
Previously, the regulatory watchdog only had concerns with banking withdrawals during the banking ban, but the recent notification might put the entire crypto trading ecosystem in danger.
