The Wazirx crypto exchange said that its bank accounts were unfrozen by the Enforcement Division (ED) in India.
The accounts had previously been frozen due to an investigation launched by the federal agency into 16 fintech firms and instant loan applications.
The investigation
On Monday, Indian crypto exchange Wazirx announced that the economic intelligence and law enforcement agency of the Indian government called Enforcement Division (ED) had unfrozen the firm’s bank accounts.
According to the company, the ED had launched an investigation focused on 16 instant loan applications and fintech companies due to which the accounts had been frozen in the first place.
Wazirx clarified that it was not associated with any of the instant loan apps or fintech entities that had been the subject of the investigation of the ED.
But, the crypto exchange disclosed that some of these companies had made use of its trading platform and this has resulted in it being targeted as well.
It was revealed by the Indian crypto exchange that it cooperated with investigators during the probe and had provided them with all the necessary documents, information, and details of the companies that had used its platform.
Account freezing
The crypto exchange stated that its active cooperation with ED and thanks to its anti-money laundering (AML) checks, suspicious accounts had been blocked.
Therefore, this prompted ED to unfreeze its accounts. It further added that Wazirx was now free to continue its banking operations normally.
The announcement of Wazirx’s bank accounts being frozen was made in early August by the Enforcement Directorate (ED).
The federal agency had elaborated that the move was in accordance with its money laundering investigation.
It was probing non-bank financial companies (NBFCs), along with their fintech partners due to their lending practices that were considered predatory and were against the guidelines of the Reserve Bank of India (RBI).
The revelations
On Monday, Wazirx disclosed that a thorough internal investigation had been carried out and it had revealed that most of the information that the ED was looking for had already been identified by the crypto exchange.
It said that Wazirx had already termed the information as suspicious and it had blocked those accounts between 2020 and 2021.
This had shown that its security measures and verification procedures were quite strong and it was not involved in any illicit practices.
As a result, the federal agency had gone ahead and unfrozen its bank accounts. Other than Wazirx, another company had had its bank accounts frozen by ED.
This was crypto trading platform Vauld, which is backed by Peter Thiel, and its assets worth $46 million had been frozen by the federal agency.
Coinswitch Kuber was also another crypto exchange that ED had searched in the month of August. But, its chief executive had clarified that it was not because of money laundering investigations.
This shows that regulatory authorities and agencies are becoming more proactive in the crypto space in order to minimize the risk of illicit activities.
