Suspicious Transactions Worth $390 Million Scanned by Law Enforcement Agencies in Last 5 Months: WazirX

Between October 2022 and March 2023, India’s WazirX crypto exchange received 431 requests from law enforcement agencies seeking details of suspicious transactions. The amount of capital tied to these requests summed up to a whopping $390 million (roughly Rs. 3,222 crore). The information was disclosed by WazirX in its fourth transparency report released on March 21. Evidently, the information hints at two focus points — large amounts of shady transactions happening via crypto and the active involvement of law enforcement agencies in tracing such activities.

While Indian agencies submitted 385 such requests to WazirX, it also recorded 46 requests from law enforcement agencies located oversees.

“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 crypto through our platform,” the exchange, founded in 2018 said in its report.

The crimes happening in and via the crypto sector often make headlines in India. Bengaluru has become a hotspot for crypto crimes, costing innocent people crores in losses. It is reported that residents of India’s IT hub lost around Rs. 70 crore to crypto frauds.

In December 2022, the Delhi Police had filed a complaint against a major crypto scam, involving Rs. 500 crore. Cybercriminals disguised as financial advisors lured in innocent victims by promising them 200 percent return on their investments.

As of June 2022, it was estimated that crypto scammers had duped Indians off Rs. 1,000 crore by posing as fake exchanges.

With the rising number of crimes shaking up the relatively nascent digital assets sector, it seems only natural that national as well as foreign law enforcement agencies are following-up on fishy transactions with licenced and registered exchanges.

WazirX, in its report, has claimed that it has blocked over 2,431 accounts after they were flagged by its internal transaction monitoring process or by law enforcement agencies.

“WazirX’s ongoing collaboration with third-party forensic tool service providers such as TRM Labs and Chainalysis has continued to make transaction monitoring and investigation an easy, smooth, and efficient process,” the report noted.

After the FTX crypto exchange based in the US collapsed last November, several crypto exchanges have begun releasing their transparency reports detailing their position in-terms of account health, user safety upgrades, and collaboration with legal agencies to curb the crime rate.

Coinbase, in a transparency report shared in December last year, had said that that it recorded a 66 percent rise in requests from global investigative agencies, taking the annual figure to 12,320.

---