Indian authorities accuse WazirX Exchange of assisting in the laundering of $130 million.

The Financial Crimes Wing of India's Enforcement Directorate (ED) is investigating cryptocurrency exchanges suspected of executing transactions that transported around $130 million from organizations under investigation to international wallets.

According to an official who talked with The Economic Times, at least ten crypto exchanges are allegedly implicated, and the bank accounts of exchange WazirX have been suspended, the newspaper reported.

In a case involving rapid loans, organizations under investigation allegedly conducted transactions totaling up to 1 billion rupees, or $1.3 million, in the names of people with no ties to the funds.

These businesses frequently had ties to China. Even though Know Your Customer/Anti-Money Laundering (KYC/AML) protocols indicated that the transactions were suspicious, the agency said that neither increased due diligence nor suspicious transaction notifications were filed with the ED.

Last Monday, the ED blocked the bank accounts of WazirX, totaling approximately 647 million rupees or $8.1 million, on the grounds that the exchange aided approximately 16 fintech companies under investigation for money laundering.

WazirX published a blog post on Tuesday "on behalf of Zanmai Labs Pvt. Ltd," which, according to the post, cooperates with WazirX and Binance, stating that all users are subject to KYC/AML processes and that the exchange works closely with law enforcement.

The blog post stated, "For every transaction, we can create the KYC information of the relevant user."

The claims against WazirX have brought to light its opaque ownership structure and Binance's position within it.

Binance CEO Changpeng Zhao (CZ) tweeted on August 5 that his business did not complete the 2019-announced acquisition of WazirX.

The following day, in a conversation with WazirX cofounder Nischal Shetty, CZ remarked, "We requested the transfer of WazirX system source code, deployment, and operations in February of this year.

WazirX refused to comply. Binance has NO control over its systems."

This probe was not the first time that WazirX was accused of lacking AML measures.

In 2021, the ED implicated WazirX in the laundering of earnings from unlawful online gaming, with a Chinese connection.