ED Raid On Crypto Firm WazirX: The company was running in a room with two chairs, was taking funds from China

Most companies are backed by Chinese funds.

The case is being probed by the ED against Indian NBFC companies and their fintech partners for violating RBI guidelines, misusing personal data with the help of tele-callers and charging high interest rates from borrowers. Not only this, abusive language has been used by the company from the customers to recover the loan amount at high interest rate. Most of the companies engaged in this business are backed by Chinese funds. When these fintech companies could not get NBFC license from RBI to do lending business, they paved the way for MoUs with defunct NBFCs. All this was done to start the business.

Huge profit earned from MoU

ED’s criminal investigation has revealed that many fintech apps have closed their shops. He then made huge profits by using the method of entering into MoUs with NBFCs. Investigating the fund trail revealed that this profit was used by fintech companies to buy crypto assets. The money earned from here was used abroad. That is, the work of laundering illegal money was started. These companies and their virtual assets are not yet known. The crypto-exchange has been summoned. In this it is seen that the maximum amount was given to the Wazirex exchange. The crypto-assets thus purchased were sent to an unknown foreign wallet.

Preferential agreement signed with Binance

Janmai Labs Private Limited, a company owned by Wazirex crypto exchange. It has created a web tie-up with Crowdfire Inc., USA, Binance (Cayman Islands), Jetty Pte Ltd. Singapore, to obscure the ownership of the crypto exchange. Earlier, their Managing Director Nischal Shetty claimed that Wazirex is an Indian exchange, which regulates all crypto and in-crypto transactions. It has an IP and preferential agreement with Binance. Now, Janmai claims that they are only involved in in-crypto transactions. All other transactions are done by Binance on Wazirex. According to the probe agency, they are giving contradictory and vague answers to evade the surveillance of Indian regulatory agencies.

All crypto transactions are controlled by Binance

Wazirex works on cloud based software. All the employees employed in it work from home. Its registered office is such that there is space to keep only two chairs. All crypto transactions are controlled by Binance, whose office is not known. No one even knows his employees. He answers questions through an email id. Despite repeated opportunities, Wazirex could not provide accurate information about suspicious transactions. Fintech APP failed to give crypto transactions of companies and reveal KYC of wallet. Most transactions are not even recorded on the blockchain. Wazirex had informed that prior to July 2020, it had not even entered the bank account details through which funds were coming into the exchange to buy crypto assets. No physical verification of his address was done. There was no investigation into the source of funds of the customers. No EDD is done. No STR raised.

Sameer Mhatre has access to Wazirex’s database

The search under PMLA was launched on August 3 due to the non-cooperative stand of the Director of Wazirex Exchange. It revealed that Sameer Mhatre, Director of Wazirex, has full access to Wazirex’s database, but is still not providing transaction details relating to crypto assets purchased from the proceeds of the Instant Loan APP fraud offense. KYC norms could not be met as they are too weak. Loose regulatory control of transactions between Wazirex and Binance, non-recording of transactions on the blockchain to save costs and non-recording of KYC of opposite wallets have ensured that Wazirex is not able to give an account of missing crypto assets. They have made no effort to trace crypto assets. He has actively assisted around 16 accused fintech companies in using the crypto route to legitimize proceeds of crime in this nebulous manner.

Expansion

Groups making huge profits through cryptocurrency exchanges are now on the radar of ED. The ED on August 3 raided one of the directors of M/s Janami Lab Pvt Ltd, which operates cryptocurrency exchange ‘Wazirex’, under PLLA. After investigation, the bank accounts of the company with a balance of Rs 64.67 crore have been frozen. This company is accused of taking huge amount of funds from China. Wazirex operates through cloud based software. All the employees employed in it work from home. Its registered office is such that there is space to keep only two chairs.

Most companies are backed by Chinese funds.

The case is being probed by the ED against Indian NBFC companies and their fintech partners for violating RBI guidelines, misusing personal data with the help of tele-callers and charging high interest rates from borrowers. Not only this, abusive language has been used by the company from the customers to recover the loan amount at high interest rate. Most of the companies engaged in this business are backed by Chinese funds. When these fintech companies could not get NBFC license from RBI to do lending business, they paved the way for MoUs with defunct NBFCs. All this was done to start the business.

Huge profit earned from MoU

ED’s criminal investigation has revealed that many fintech apps have closed their shops. He then made huge profits by using the method of entering into MoUs with NBFCs. Investigating the fund trail revealed that this profit was used by fintech companies to buy crypto assets. The money earned from here was used abroad. That is, the work of laundering illegal money was started. These companies and their virtual assets are not yet known. The crypto-exchange has been summoned. In this it is seen that the maximum amount was given to the Wazirex exchange. The crypto-assets thus purchased were sent to an unknown foreign wallet.

Preferential agreement signed with Binance

Janmai Labs Private Limited, a company owned by Wazirex crypto exchange. It has created a web tie-up with Crowdfire Inc., USA, Binance (Cayman Islands), Jetty Pte Ltd. Singapore, to obscure the ownership of the crypto exchange. Earlier, their Managing Director Nischal Shetty claimed that Wazirex is an Indian exchange, which regulates all crypto and in-crypto transactions. It has an IP and preferential agreement with Binance. Now, Janmai claims that they are only involved in in-crypto transactions. All other transactions are done by Binance on Wazirex. According to the probe agency, they are giving contradictory and vague answers to evade the surveillance of Indian regulatory agencies.

All crypto transactions are controlled by Binance

Wazirex works on cloud based software. All the employees employed in it work from home. Its registered office is such that there is space to keep only two chairs. All crypto transactions are controlled by Binance, whose office is not known. No one even knows his employees. He answers questions through an email id. Despite repeated opportunities, Wazirex could not provide accurate information about suspicious transactions. Fintech APP failed to give crypto transactions of companies and reveal KYC of wallet. Most transactions are not even recorded on the blockchain. Wazirex had informed that prior to July 2020, it had not even entered the bank account details through which funds were coming into the exchange to buy crypto assets. No physical verification of his address was done. There was no investigation into the source of funds of the clients. No EDD is done. No STR raised.

Sameer Mhatre has access to Wazirex’s database

The search under PMLA was launched on August 3 due to the non-cooperative stand of the Director of Wazirex Exchange. It revealed that Sameer Mhatre, Director of Wazirex, has full access to Wazirex’s database, but is still not providing transaction details relating to crypto assets purchased from the proceeds of the Instant Loan APP fraud offense. KYC norms could not be met as they are too weak. Loose regulatory control of transactions between Wazirex and Binance, non-recording of transactions on the blockchain to save costs and non-recording of KYC of opposite wallets have ensured that Wazirex is not able to give an account of missing crypto assets. They have made no effort to trace crypto assets. He has actively assisted around 16 accused fintech companies in using the crypto route to legitimize proceeds of crime in this nebulous manner.