India’s Financial Intelligence Unit (FIU) is now investigating suspicious cryptocurrency transfers potentially originating from Pakistan and moving into India through private wallets. These wallets are not linked to any centralized exchange, making it challenging for authorities to trace them and raising red flags about potential illicit activity or terror financing.
According to a revised report by Moneycontrol, the FIU is collecting data to identify accounts that may be receiving crypto from Pakistan-based sources. However, these transactions are occurring through private wallets — not tied to any specific exchange — which raises serious concerns for investigators.
The scrutiny is aimed at understanding the nature of crypto transfers occurring across the Jammu & Kashmir region and Pakistan border areas, with suspicions of illegal use cases. These transactions, facilitated by non-exchange private wallets, make regulatory tracking difficult and may pose national security risks.
While Binance is currently under investigation in this matter, WazirX has clarified that it is not under any scrutiny by the FIU. In an official email sent to Coinpedia, a WazirX spokesperson noted:
“There have been no transactions on the WazirX platform since July 18, 2024, and even before that, crypto withdrawals were not permitted. WazirX has always upheld a strong commitment to regulatory compliance and transparency. We maintain a strict zero-tolerance policy towards any unlawful activity on our platform.”
Furthermore, the original article by Moneycontrol has been edited to reflect this correction. You can read the revised report here.
While WazirX is not involved in the current FIU investigation, the exchange continues to face separate legal and restructuring challenges following the $235 million hack on July 18, 2024. The Singapore High Court earlier rejected the restructuring plan proposed by its parent company, Zettai, citing failure to disclose the creation of a Panama-based entity and non-compliance with regulatory licensing in Singapore and India.
In a recent court filing, tech entrepreneur Romy Johnson submitted a 72-page affidavit alleging that Zettai wrongfully grouped hacked and unhacked user funds to push a flawed restructuring proposal. Johnson also raised serious questions regarding fund ownership and the exchange’s legal obligations toward users.
The WazirX user community continues to demand clarity from founder Nischal Shetty. A series of public tweets outline six critical concerns:
The July 15 court hearing in Singapore is expected to play a key role in determining the future of the exchange and the fate of user-held funds. Though not linked to the FIU’s probe into Pakistan-linked wallets, WazirX remains in the spotlight for internal legal and user rights issues.
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