WazirX blocked 2,431 accounts in past six months (2024)

Cryptocurrency exchange WazirX blocked over 2,431 accounts based on its internal transaction monitoring process or directives from the law enforcement agencies during October 2022 to March 2023 period, the company said in its biannual transparency report.

Comparatively, WazirX had initiated the blocking of around 700 accounts in the March 2022 to September 2022 period.

During the October-March duration, the cryptocurrency exchange received 431 requests from law enforcement agencies, against a total transaction volume of $390 million on the platform. 46 requests were from foreign law enforcement agencies, while 385 requests were from Indian agencies. These requests pertain to seeking user data, content, and account restrictions.

All of these requests pertained to matters related to account blocking, suspected criminal proceedings, investigation, and information was sought from WazirX as to whether such accused had dealt in cryptocurrencies through the platform.

“WazirX promptly provided all information as sought, and our compliance rate in record timeliness and accuracy was 100%. Apart from that, blocking of over 2,431 accounts was also initiated based on our internal transaction monitoring process and/or directives from the LEAs,” it said in the report.

It added that some of the Indian and Foreign Law Enforcement Agencies that WazirX has worked with during this period are: National Investigation Agency (NIA), Enforcement Directorate, state cyber crime cells, Odisha Vigilance Department, Special Task Force, Bhopal Police, West Bengal Police, Maharashtra Police, in addition to foreign agencies such as crime branch, Toronto Police Department, Police Department Dortmund, New York County District Attorney, Burlington Police, California Police Department, Florida Police, etc.

WazirX vice-president Rajagopal Menon said: “The transparency report is a testament to our commitment to enabling a secure and reliable crypto ecosystem for our users. We focussed our efforts on making our platform more user-friendly and provided robust customer service for our users to connect with for any concerns”.

“We also kept up our ongoing efforts of collaborating with law enforcement agencies to make crypto free of any fraudulent activities and usher in an environment of trust,” he added.

Earlier this month, finance minister Nirmala Sitharaman had said in response to a question in Parliament that proceeds amounting to Rs 953.70 crore from criminal activities involving cryptocurrencies have been seized, frozen or attached under the provisions of Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA). She was responding to a question on whether the government was aware of cryptocurrencies being used for money laundering.

Notably, last week, the finance ministry tightened the definition of the Prevention of Money Laundering Act (PMLA) and included cryptocurrencies in the definition of the anti money laundering law.

With this, crypto exchanges and intermediaries dealing with virtual digital assets will now be required to perform KYC of their clients and users of the platform. As per the amendments, entities dealing in virtual digital assets (VDAs) will now be considered 'reporting entity' under the PMLA.