India’s FIU Probes Binance and WazirX Over Suspicious Crypto Transactions

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WazirX and Binance are in trouble as India’s FIU looks into crypto transfers from Pakistan. Authorities are now tracking wallet transactions that may be linked to illegal or terror-related activities.

India Probes Binance, WazirX Over Crypto Transfers Linked to Pakistan

As reported by Money Control, officials stated that FIU is collecting data from Binance to identify accounts that may be receiving cryptocurrency in private wallets from Pakistan. These wallets are not tied to any exchange, which is making it harder to trace them. Authorities are concerned that such transfers may be linked to illegal activities or even terror financing in India. 

Both Binance and WazirX are being investigated, as they are often used for cross-border crypto transfers. Officials have noticed a rise in crypto transactions between Jammu & Kashmir and Pakistan border areas, and they suspect that some of these may be linked to terror funding.

Ironically, this comes after WazirX issued a PR piece defending why its parent firm, Zettai, does not need FIU-IND registration. Now, that very regulator is investigating them for serious cross-border risks. All eyes are on the July 15 Singapore court hearing, as the outcome could decide the future of WazirX and the fate of user-held crypto.

Recently, Romy Johnson filed a 72-page affidavit in the Singapore High Court that could decide whether WazirX users legally own their crypto. The filing claims WazirX wallets were linked to ISIS-related activity through TRX token transfers to a Syria-based entity.

Users Demand Transparency

WazirX users are now demanding clear answers from founder Nischal Shetty amid growing concerns over the failed restructuring and asset transparency. They have raised six key questions that remain unanswered.

The issues include the true ownership of user-held crypto, the absence of a Proof of Reserves, undisclosed multisig wallet signatories, ₹364 crore in related-party transfers to entities linked to Shetty, and ₹920 crore in unaccounted revenue. Users are calling for clear, verifiable responses.

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WazirX Faces Legal Heat 

Previously, WazirX suffered a major blow as Singapore’s high court rejected the restructuring plan of its parent company, Zettai, after the $235 million hack. The court cited Zettai’s failure to disclose the creation of a Panama-based subsidiary and its decision not to get the required licenses from Sinagore and India. 

WazirX is also facing a legal battle for freezing users’ unhacked crypto and fiat funds. A key affidavit by Romy Johnson claims that Zettai wrongly grouped user-owned assets with hacked ones to push a flawed restructuring plan and violated trust laws. 

With a court hearing nearing, this case could shape how crypto platforms treat customer funds in the future.