The Enforcement Directorate is reportedly examining if Binance Holdings Ltd. had a role to play in an ongoing investigation involving betting apps. As first reported by Bloomberg, the law enforcement agency has summoned Binance executives for questioning and is awaiting a response. India is probing betting apps run by Chinese operators that gained prominence during the Covid19 lockdown in 2020. The app operators who did not have necessary registrations laundered part of the proceeds through the Binance subsidiary Indian subsidiary WazirX.
The world’s leading exchange has been facing regulatory crackdown as nations intensify scrutiny of the industry amid concerns that cryptocurrencies are being used to conceal proceeds of money laundering, drug dealing, and terrorism. In India, WazirX is under investigation for violation of foreign exchange laws. On June 18, it was reported that the Mumbai wing of Narcotics Control Bureau (NCB) had sought details from WazirX about an alleged drug dealer on its platform. WazirX was bought by Binance in 2019.
A Binance spokesperson informed Bloomberg that the exchange had not received any summons in June or this month. “We have always been a proactive player in fighting crime,” the spokesperson was quoted by Bloomberg. “We comply with regulator requests all around the world and we don’t comment on any specific engagements.”
The holding entity is reportedly incorporated in the Cayman Islands and the group has an opaque structure. The charismatic founder CZ once said that the company has no headquarters.
Malaysia bans Binance
In another related development, the Securities Commission Malaysia (SC) today announced enforcement actions against Binance for illegally operating a Digital Asset Exchange (DAX). The exchange has been ordered by the SC to:
- disable the Binance website (www.binance.com) and mobile applications in Malaysia within 14 business days from 26 July 2021;
- immediately cease all media and marketing activities, including circulating, publishing or sending any advertisements and/or other marketing material, whether via emails or otherwise, to Malaysian investors; and
- immediately restrict Malaysian investors from accessing Binance’s Telegram group.