A minimum of ten cryptocurrency exchanges are under lens of Enforcement Directorate (ED) for allegedly laundering more than ₹1,000 crore in the instant loan app case, reported The Economic Times.
The probe has shown instances of the accused firms approaching the exchanges to buy crypto coins for more than ₹100 crore and crypto coins being sent to international wallets, the people told ET on condition of anonymity.
The exchanges did not conduct any enhanced due diligence and even failed to raise suspicious transaction reports (STRs), they said.
The ED is expected to question officials of the crypto exchanges under investigation again next week, said an industry executive.
“While so far the agency has frozen the accounts of WazirX, similar transactions have taken place on the other exchanges and they have been asked to join the probe,” said an official familiar with the development.
In many cases, the KYC details (know your customer) collected by the exchanges were found to be dubious, according to a person privy to the information. "They were traced to some persons living in remote areas or a tier-2 or tier-3 town, having no connection with the transactions," said the person to ET.
While exchanges claim that they were meeting the required compliance requirements by maintaining the KYC details, they failed to raise STRs, according to the person.
The ED is also closely monitoring the recent public row between WazirX CEO Nischal Shetty and Binance CEO Changpeng Zhao on social media.
The agency froze bank accounts of the exchange which had funds of ₹65.67 crore. According to the agency, the exchange has actively assisted about 16 fintech companies under investigation on charges of money laundering to divert their alleged proceeds of crime using the crypto route.
It said the probe has found that the exchange has a complicated ownership structure, making it “obscure”.