The cryptocurrency exchange claims to have a zero-tolerance approach to criminal activity.
WazirX issued a statement in response to the Enforcement Directorate (ED) shutting down the cryptocurrency exchange and freezing its bank accounts and declaring that it has a zero-tolerance policy for illicit activity.
"WazirX is a platform that Zanmai Labs Pvt. Ltd (Zanmai Labs) and Binance have jointly developed. WazirX-based illicit activity is not tolerated by Zanmai Labs. Users consent to using WazirX in compliance with all applicable laws (as stated in the user agreement). WazirX users can only sign up after completing the KYC process, which includes providing identification and address proof, according to a statement from the company.
The incident attracted attention when state minister of finance Pankaj Chaudhary stated in the Rajya Sabha that the ED had sent WazirX a notice under the FEMA Act. He claimed that the ED is investigating two cases involving cryptocurrency against WazirX under the rules of FEMA in a written response to the Rajya Sabha.
"We have been collaborating closely with the ED for a few days, and we have responded to all of their inquiries with thorough and frank responses. The users whose transactions it appears the ED is looking into having no link to Zanmai Labs. According to the corporate statement, it is unaware of the rationale behind its transactions.
In the meantime, Binance, which also owns WazirX, claimed it never owned the company because the transaction was not completed as the ED increased pressure on WazirX. The founders of WazirX and Binance, Changpeng Zhao and Nischal Shetty engaged in a verbal battle on Twitter as well. Additionally, Binance0 announced that starting on August 11 it will discontinue the off-chain fund transfer mechanism between the two platforms.