India freezes Bitcoin at Binance amid Wazirx probe

By: Micheal Wilson

September 30, 2022 9:26 AM

More than 77.6 bitcoins that had been transferred to Binance from the Indian cryptocurrency exchange Wazirx have been frozen, according to India's Enforcement Directorate (ED). In this case, the freeze is connected to an inquiry into possible money laundering related to a mobile gaming app.

On Wednesday, the Indian government's Directorate of Enforcement (ED) announced that it had frozen 77.62710139 bitcoins per the country's Prevention of Money Laundering Act (PMLA). The Enforcement Division (ED) is the Indian government's primary agency for enforcing laws and gathering economic intelligence.

The ED has placed the app on ice as part of their investigation into the mobile gaming app E-nuggets. The cryptocurrency was reportedly moved from the well-known Indian exchange Wazirx to the cryptocurrency trading platform Binance. A summary of the ED's decision was also posted to Twitter.

Binance, the largest cryptocurrency exchange in the world, has had its funds frozen as part of India's ongoing investigation into Wazirx.

According to the police, "Aamir Khan, S/o Nesar Ahmed Khan launched a mobile gaming application namely E-Nuggets, which was designed to defraud [the] public," and they went on to say:

After amassing a sizeable sum of money from users, the app abruptly cut off their ability to withdraw funds. The app servers were then cleared of any and all data, including user profiles.

According to the ED's findings, the accused sent some of the stolen money abroad by way of the Indian cryptocurrency exchange Wazirx.

According to the ED, the accused created a Wazirx account under the assumed identity of "Sima Naskar (Proprietor of M/s Pixal Design)" and subsequently used it to buy cryptocurrencies.

The aforementioned cryptocurrencies were then moved to an account on Binance, another cryptocurrency exchange.

The ED stated that the Binance crypto exchange had frozen the balance of the transferred cryptocurrencies, amounting to 77.62710139 bitcoins (approximately USD 1,573,466 or Rs 12.83 crore).

Wazirx was rumored to have been acquired by Binance in 2019. However, according to Binance CEO Changpeng Zhao (CZ), the acquisition "was never completed," highlighting that "Binance has never — at any point — owned any stock of Zanmai Labs, the organization operating Wazirx."

Wazirx's over $8 million in frozen bank assets were locked by the ED in August. Wazirx, however, announced earlier this month that access to its frozen bank accounts had been restored. After the Wazirx incident, the ED froze $46 million in crypto and bank assets belonging to Vauld, another cryptocurrency platform backed by Peter Thiel. The agency inspected the Coinswitch Kuber cryptocurrency exchange in August. But the exchange CEO denied that it had anything to do with anti-money-laundering probes.