77.6 bitcoins transferred to Binance from cryptocurrency exchange Wazirx have been frozen by India’s Enforcement Directorate (ED). The institution in charge of law enforcement in the financial sector says that this freeze is due to the investigation on money laundering that targets the sender of the fund since last year. A case that revives the controversial acquisition of the WazirX platform by the cryptocurrency exchange Binance in India.
Enforcement Directorate gets hold of $1.5 million in Bitcoin!
Under India’s Prevention of Money Laundering Act, the Enforcement Directorate (ED), the Indian government’s law enforcement and economic intelligence agency, said it has frozen more than 77.6 bitcoins. According to the ED’s statement, these cryptocurrencies worth $1,573,466 at the time of the incident had been transferred to Binance from the cryptocurrency exchange Wazirx by one Aamir Khan. The latter is under investigation for money laundering.
ED has frozen 77,627,10139 Bitcoins [equivalent to $1,573,466] under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, in connection with an investigation against one Aamir Khan and others regarding the mobile gaming app E-nuggets.ED
For the Indian authorities Aamir Khan is only a swindler
In 2021, the Federal Bank Authorities filed a complaint against Aamir Khan in a court in Calcutta for money laundering. In February 2021, the investigation entrusted to the ED began and is still ongoing. The Indian authorities accuse Aamir Khan of having launched a game application called E-Nuggets in order to defraud users.
Indeed, after collecting a large amount of money via his app, Aamir Khan suddenly deleted all the users’ data. He then removed the application online without providing any explanation to the users.
The investigation conducted by the Enforcement Directorate revealed that Aamir Khan transferred part of the amount collected via E-Nuggets abroad. To hide his identity, he had created a fictitious account in the name of Sima Naskar on WazirX, an Indian crypto exchange. It was from this fictitious account that he transferred his $1,573,466 to Binance.
The Binance & WazirX case back in the spotlight
This contentious transfer of the WazirX exchange to Binance rekindles questions about the acquisition of the Indian platform by Binance. Indeed, in 2019, Binance had announced the acquisition of WazirX.
“The acquisition of WazirX demonstrates our commitment and dedication to the people of India and strengthens the blockchain ecosystem in India,” Changpeng Zhao (CZ), the CEO and co-founder of Binance, said at the time, among other things.
Very recently amidst the accusations aimed at WazirX, Changpeng Zhao (CZ) went back on his 2019 comments. Specifically, he said in a thread that Binance’s announced 2019 acquisition of WazirX was never completed and that his platform does not own any shares in Zanmai Labs, the entity that operates WazirX. Still, CZ admits that Binance is collaborating with WazirX as a technical provider of wallet services. Nevertheless, the management of the platform is entirely in the hands of Zanmai Labs, according to CZ.
Reacting visibly to the announcement of the freezing of $8 million from WazirX , the CEO of Binance had announced that his company was concerned about the allegations of malfunctioning of WazirX. Binance said it was ready to cooperate with the Indian authorities in their investigations.
On November 21, 2019, Binance published a blog post stating that it had “acquired” WazirX. That transaction never came to fruition. Binance never – at any time – owned any shares of Zanmai Labs, the entity operating WazirX. Binance only provides wallet services for WazirX as a technical solution… WazirX is responsible for all other aspects, including user registration, KYC, trading and withdrawal initiation.CZ on 05 August 2022
WazirX considers that Binance has already bought the Indian exchange completely. In a thread that seems to be a response to Changpeng Zhao’s (CZ), Nischal Shetty, the founder calls not to confuse Zanmai Labs and WazirX. For him, it is Binance that operates WazirX through the management of P2P transactions, withdrawal on WazirX, ownership of the WazirX domain, access to the Wazirx server, ownership of all cryptos and profits generated on the platform.
CZ fiercely refutes these allegations. The CEO of Binance maintains that his platform has no control over trading on WazirX. In India, WazirX is not the only cryptocurrency exchange in the crosshairs of the financial watchdog. Vauld, another crypto exchange saw its $46 million frozen last month. These crypto operators need to stem the tide of trouble with the regulator. Otherwise, it will be difficult to take full advantage of the growing Indian crypto market.
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