Indian Crypto Exchange WazirX Issued Notice For “Mysterious Transactions”

Indian Crypto Exchange WazirX Issued Notice For “Mysterious Transactions”

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Indian Crypto Exchange WazirX Issued Notices For


Indian crypto platform WazirX has been served a show cause notice [SCN] for allowing outward remittance of crypto assets to the tune of 2790 crore to unknown wallets, the Ministry of Finance told the Upper House on August 2. 

The exchange is currently under the scanner of the nation’s law enforcement agency- The Directorate of Enforcement [ED] which is investigating two cases against the former under the provisions of the Foreign Exchange Management Act, 1999 [FEMA],

The first case is about Zanmai Labs, which operates WazirX, for using the walled infrastructure of Binance. Secondly, the agency accused the platform of allowing foreign users to convert one crypto into another by using transfers from third-party exchanges namely FTX, Binance, etc.

Further, it has been found that all crypto transactions between these 2 exchanges were not even being recorded on the blockchains and were thus cloaked in mystery. Accordingly, a show cause notice (SCN) has been issued under the provisions of FEMA against WaxirX for allowing outward remittance of crypto assets worth Rs 2,790 crore to unknown wallets.

Last month ED also sent out notices to a number of exchanges including WazirX to seek details about customer transactions.

WazirX Was Fined $5 Million For Alleged Tax Evasion

Last year, the Goods and Services Tax [GST] Department started probing into the activities of cryptocurrency exchange WazirX for allegedly evading Rs 40.5 crore in tax. The authorities said it recovered Rs 49.2 crore from the firm – the GST owed plus interest and penalties.

The indirect tax department revealed that WazirX issued its own cryptocurrency- WRX coins through Zanmai Labs without paying GST on it.

At that time, a spokesperson denied the allegations saying that they have been paying GST every month and there seems to be ambiguity around the tax framework.

As reported by TronWeekly, Indian Finance minister Nirmala Sitharaman stated in Parliament that a decision of banning or regulating crypto assets will only take place after proper consultation with global stakeholders weighing on the risks and benefits.

In a written response, Sitharaman said this is to prevent ‘prevent regulatory arbitrage.’

The latest development comes at a time when the Indian crypto industry is struggling with new taxation rules and a massive drop in its daily trading volumes.

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