The Hyderabad-based Zanmai Lab, which operates the well-known cryptocurrency exchange WazirX, was raided by the Enforcement Directorate (ED) today, and the bank balance of 64.67 crore Rupees in Zanmai Lab’s accounts was also frozen, according to officials. The director of the firm named Sameer Mhatre was the target of yesterday’s raids. He is said to have full remote access to WazirX’s database, but he withholds information about the transactions.
This comes just days after the Minister of State for Finance Pankaj Chaudhary told Parliament that the ED is investigating two cases related to WazirX, for alleged violation of the Foreign Exchange Management Law.
It is believed that some instant loan apps or online financial firms with Chinese backing redirected their profits to purchase cryptocurrencies in order to later launder the money overseas. According to ED officials, these included fintech companies that were refused licences to operate loan businesses because they had exploited personal data and intimidated loan applicants with harassing calls and extortion.
According to an ED notice, the majority of the funds were redirected to the WazirX exchange, and the cryptocurrency. Assets that were purchased with the fraudulent money were then transferred to unidentified international accounts. According to the agency, it is currently impossible to find these companies or virtual assets. Investigators think that Zanmai Labs, the entity that owns WazirX, has established “a web of agreements” using companies in the US, Singapore, and the Cayman Islands with the intention to “obscure the ownership of the crypto exchange”