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An Indian Authority Is Looking Into Allegations Of Forex Law Violations At A Cryptocurrency Exchange

WazirX, a Mumbai-based cryptocurrency exchange, has been the focus of much of India’s regulatory attention as it continues to attract local investors.
The Directorate of Enforcement (ED) issued a show-cause notice to WazirX for allegedly violating the Foreign Exchange Management Act in respect to transactions totaling 2,790.74 crore rupees ($372 million) in the most recent run-in with the government.
According to The Economic Times, the Binance-owned cryptocurrency exchange gained notoriety after the ED questioned its ability to allow users to make cross-border transfers without government monitoring.
“They were carried out in contravention of FX rules,” an ED officer stated.
The notification given to WazirX is based on accusations that “one needs to be sure that this money isnt cheap money (low-interest loan) or filthy money (used for criminal operations).”
The crypto exchange, on the other hand, will be unable to track the identity of the receiver’s wallet.
Without proper KYC measures, connecting an individual to a recipient’s wallet address is practically impossible, as crypto fans all around the world know.
“The exchange has said they have done KYC,” the ED official added, “but that isn’t enough to ensure that the digital money isn’t misused.”
In the absence of any official digital currency or regulation, Bitcoins have been used to buy drugs on the dark web and for money laundering.” WazirX informed Cointelegraph: “We are able to trace all users on our site with official identifying information.”
WazirX expects to comply with ED’s notification, noting that “here is where regulatory clarity would benefit us a lot.” Related: Indian high court requests ad disclaimers from crypto exchanges
The court wants to enforce new rules for crypto advertisements, including a disclaimer that takes up 80% of the screen.
The petition also requests that crypto companies add a voiceover underlining the risks of crypto investments.
While Indian authorities continue to investigate local crypto developments, they have yet to make an official statement on the technology.
ICICI Bank, India’s traditional banking powerhouse, had previously warned its remittance users not to utilize the platform for crypto transfers or to invest any fiat currency that had previously been linked to crypto transactions.

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