Reports say, India’s premier financial law enforcement agency, Enforcement Directorate (ED), is probing Binance Holdings Ltd.’s involvement in betting apps. The exchange however denies any probe.
The latest summons
The ED has summoned Binance employees for interrogation, says a bloomberg report. India is currently investigating betting apps run by Chinese operators which have collected around INR 1000 crores laundered through Binance owned Indian cryptocurrency exchange Wazirx.
Moreover, it was mentioned in Bloomberg’s account, ED has claimed Binance didn’t collect know-your-customer (KYC) documents from clients in most transactions. The exchange also didn’t collect information required by global anti-money laundering watchdog the Financial Action Task Force (FATF).
Response from Binance
Binance, in a statement to Coin Crunch said, “We would like to clarify that Binance has not received any summons from the Enforcement Directorate.”
“We work closely with regulators, law enforcement and industry leaders around the world to further the security and sustainability of the industry while providing the best services and protection to our users,”Binance Statement
The insider also shed light on Binance’s efforts in curbing money laundering, identifying, and keeping proper track of its users.
“On our own platform — Binance.com — our ongoing coordination with regulatory technology providers such as Refinitiv, TRM Labs, and Elliptic further empowers our ability to monitor and trace transactions, streamline KYC (Know Your Customer) processes, and overall align our AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) efforts with global compliance standards. We enforce geo-fencing detection to block IP addresses from restricted regions, as well as common VPNs.”
As claimed by the employee, the summonses by the ED were not received by Binance even in the months of June or July of this year; they were directed to WazirX.
Previous summons by ED
In June ED had asked WazirX about the transactions worth INR 2,790.74 crores. ED said the INR 800 crores crypto inflow and INR 1,400 crores crypto outflow were not available on the blockchain.
Recently, the Economic Times reported that ED has asked WazirX to explain why ‘withdrawal from crypto wallets’ is not a violation of the Foreign Exchange Management Act (FEMA).
“These were carried out in violation of forex rules. WazirX’s platform allowed clients to transfer cryptocurrencies without proper documentation, making it a route for laundering,” said an official to ET.
Globally, governments are fearing the use of cryptocurrencies for money laundering or any illicit activity. The Financial Action Task Force is playing a key role in it. A concerted and collaborative effort between the industry players and governments can help to strengthen industry and regulations, and build confidence.