ED’s WazirX Probe, Public Spat Among Advertisers Said To Reveal the ‘Dark Side of Cryptocurrency’

The ED investigation into alleged money laundering by cryptocurrency exchange WazirX and the ensuing controversy among its promoters revealed the ‘dark side’ of cryptocurrencies, a top government source told PTI on Thursday. Thursday. The source added that people should be cautious when there are no regulations governing cryptocurrencies and so-called trading exchanges in them.

“Caution is the word that should be on the minds of people dealing with cryptocurrencies. In episode WazirXpeople already know the darker side, caution is needed in crypto trading,” the source told PTI.

The Executive Board (ED) was investigated for money laundering allegations against WazirX.

The agency has frozen Rs 64.67 worth of bank deposits as part of an ongoing money laundering investigation into several fraudulent smartphone-based lending apps “backed by Chinese funds”.

Within days of the ED action, a public controversy broke out between the global crypto platform Binance CEO Changpeng Zhao and WazirX co-founder Nischal Shetty.

Zhao distanced himself from operations at WazirX, while the Indian legal entity said it was exploring legal actions against Binance.

State Finance Minister Pankaj Chaudhary has said in Parliament that an official announcement has been issued under the provisions of the Foreign Exchange Management Act (FEMA) against WazirX for allowing offshore transfers of crypto assets worth Rs2,790 crore to unknown wallets.

Furthermore, in another case, it was found that WazirX allowed requests from foreign users to convert one cryptocurrency into another on its own platform as well as by using using transfers from third-party exchanges, namely FTXand Binance, he said.

Government sources say the WazirX episode has raised a lot of issues and the ED is investigating the incident.

India does not recognize cryptocurrencies, but levies a 30% tax on income earned from such virtual digital assets.

Finance Minister Nirmala Sitharaman has been making a strong case for global regulation of cryptocurrencies to address money laundering and terrorist financing risks.

At the G20 Ministerial Conference on Taxation and Development in Bali, she suggested that the G20 should examine the feasibility of introducing non-financial assets such as cryptocurrencies for the purpose of automated information exchange between countries. country to check for tax evasion.

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