Top Crypto Exchanges Charged with Money Laundering

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India is looking into ten crypto exchanges for money laundering totaling $125 million

The Enforcement Directorate of India is investigating ten exchanges for laundering more than Rs 1,000 crore ($125 million) in cryptocurrency. The Enforcement Directorate of India is investigating ten crypto exchanges for allegedly laundering more than 1 billion rupees or more than $125 million in digital currency. According to The Economics Times, the exchanges (which have yet to be identified) were used by several companies accused of money laundering to purchase cryptocurrency worth more than 100 million rupees, which were then transferred to other international wallets, most of which were linked to mainland China.

 

Exchanges had little control over their user’s activities

Furthermore, the exchanges collected KYC data of dubious provenance, as the tracked accounts belonged to people living in remote areas with no connection to the transactions. However, the exchanges claimed they complied with KYC regulations, even though no suspicious transaction reports (STRs) were produced, which could have revealed information about suspected money laundering. According to sources close to the investigation, the failure to comply with the measures required by regulators made it more difficult to trace the account, which, upon learning of the investigation, proceeded to withdraw its funds and log off.

 

Binance and WazirX, two cryptocurrency exchanges, are under investigation in India

Binance and WazirX are in the sights of the ED, according to CryptoPotato, following several Twitter spats between the CEOs of both companies over ownership and regulatory non-compliance by WazirX.

Following the spat between the two companies, the ED froze WazirX’s bank accounts, which held more than $8 million, alleging that the exchange “actively” aided in the money laundering of more than 15 fintech companies.

Binance, for its part, stated that it expects WazirX to take full responsibility for its operations and users’ funds, emphasizing that the global crypto exchanges have nothing to do with WazirX’s operations. Although the ED is looking into several cryptocurrency exchanges for money laundering, an industry executive told the Economic Times that the exchanges are the second point of failure in these crimes because the money comes in and out primarily from traditional banks, which also did little to nothing to trace the funds, which is why “it wasn’t caught at the banking level.”