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- India targets Binance and WazirX over suspicious cross-border crypto flows
- WazirX wallets linked to ISIS through TRX token transfers, affidavit says
- Users demand answers over frozen assets and undisclosed crypto holdings
Binance and WazirX are under investigation as India’s FIU examines crypto transfers possibly tied to terror funding. Authorities have flagged suspicious activity involving digital wallets in Pakistan and the border areas of Jammu and Kashmir.
According to these officials, crypto has been sent to private wallets that are not registered with one exchange or another. The lack of an exchange affiliation makes these wallets more challenging to trace and follow.
The FIU is gathering information about Binance to find such wallets. Investigators suspect that such transfers might be part of illegal or terrorist-related operations against India.
WazirX is also under consideration, though it previously spoke in its defense regarding the regulatory stance. A recent court rejection of a restructuring plan by its parent company, Zettai, came after a hack tied to the restructuring stole some 235 million dollars.
The Singapore court referred to the absence of Zettai’s regulatory licenses or disclosures regarding its creation of a Panama-based subsidiary. This ruling also raised increased suspicions about WazirX’s financial activities.
Affidavit Links WazirX Wallets to ISIS and Fuels User Backlash
An affidavit, submitted by businessman Romy Johnson in a 72-page complaint, accuses WazirX wallets of being connected to Syria-based accounts with connections to ISIS. According to the allegations, the transfers concerned TRX tokens and raised significant concerns about misuse of the platform.
The affidavit has caused numerous alarms and substantiated the current investigation. Regulators are currently more interested in understanding how these wallets have been used without detection.
While this is happening, WazirX users are awaiting a response from founder Nischal Shetty. They have voiced concerns regarding the lack of proof-of-reserves and opaque wallet signatories.
There are reports of an unaccounted transfer of 364 crores to Shetty affiliates and 920 crores in unreported income, which has contributed to user frustration and mistrust.
Users’ allegations state that during Zettai’s restructuring plan, unhacked funds were unnecessarily frozen without proper justification. According to legal documents, user assets were merged with hacked money without their consent.
The next Singapore court hearing, scheduled for July 15, could determine the legal ownership of WazirX user assets. This case may also set a precedent for how crypto exchanges handle user funds in cross-border investigations.
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