The Financial Intelligence Unit (FIU) has been instructed by the Indian Ministry of Finance to launch a thorough investigation into WazirX, a well-known cryptocurrency exchange in India, concerning alleged fraudulent activities.
This directive, issued on February 14, 2025, indicates the government’s increasing scrutiny of the cryptocurrency sector and its commitment to ensuring financial security.
The order, documented in an official memorandum (F.No.K-12017/1/2025-Coord) and stemming from a letter received from Shri Kailash Chand Joshi, Under Secretary (Legal), Department of Expenditure, M/o Finance, New Delhi, tasks the FIU with taking decisive action on the matter. The memorandum, addressed to the Director of the FIU, calls for a detailed examination of WazirX’s operations in light of the fraud allegations.
The investigation aims to determine the nature, scope, and potential impact of the alleged fraudulent activities. It will likely involve a detailed review of the exchange’s transaction records, compliance procedures, and internal controls. The FIU’s finding could lead to regulatory sanctions, legal action, and a tightening of regulations governing cryptocurrency exchange in India.
Evidence Against WazirX
Evidence against WazirX stems from multiple issues, including allegations of enabling money laundering for fintech companies through lax KYC and regulatory controls, as highlighted by the Enforcement Directorate (ED).
The ED criticized the exchange for failing to provide KYC details, neglecting to record bank account details, and weak controls over transactions with Binance.
Further damaging its reputation, the exchange suffered a $230 million cyberattack in July 2024, exposing significant security vulnerabilities and operational mismanagement, including discrepancies in transaction data and inadequate safeguards in wallet operations. Blockchain analysts linked the attack to North Korea’s Lazarus Group.
These issues collectively point to regulatory non-compliance, security breaches, and operational lapses at the exchange.
The development reflects the ongoing debates surrounding cryptocurrencies and the need for proper regulatory frameworks to protect investors and prevent financial crimes. The investigation’s outcome is eagerly awaited by stakeholders in the cryptocurrency industry and the broader financial community.
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