Indian law enforcement says that WazirX Exchange helped launder $130 million.

India's financial crimes agency, the Enforcement Directorate (ED), is looking into cryptocurrency exchanges that may have helped firms under investigation send more than 10 billion rupees, or about $130 million, to international wallets.

An official who spoke to The Economic Times said that at least ten crypto exchanges are involved. The newspaper also said that the bank accounts of one exchange, WazirX, have been frozen.

Companies that are being looked into in a case about instant loans are said to have sent up to 1 billion rupees, or $1.3 million, to people who had nothing to do with the money.

Most of the time, these companies had ties to China. Even though Know Your Customer/Anti-Money Laundering (KYC/AML) procedures showed that the transactions were suspicious, the agency said that there was no enhanced due diligence and no suspicious transaction reports were sent to the ED.

Last week, the ED froze the bank accounts of WazirX, which had about 647 million rupees, or $8.1 million, in them. They did this because they said that the exchange had helped 16 fintech companies that were being investigated for money laundering.

On Tuesday, WazirX posted a blog post "on behalf of Zanmai Labs Pvt. Ltd," which, according to the post, works with both WazirX and Binance. The post said that all users are subject to KYC/AML processes and that the exchange works with law enforcement in full.

The blog post said, "For every transaction, we can show the KYC details of the user in question."

The accusations against WazirX have brought attention to its unclear ownership structure and the role that Binance plays in it.

Binance CEO Changpeng Zhao (CZ) tweeted on August 5 that his company did not buy WazirX as planned in 2019.

The next day, in a conversation with WazirX cofounder Nischal Shetty, CZ said, "We asked for the source code, deployment, and operations of the WazirX system as recently as February of this year.

WazirX said no to this. Binance does NOT have control over their systems."

This investigation was not the first time that WazirX was accused of not taking enough anti-money laundering (AML) steps.

In 2021, the ED said that WazirX was involved in laundering money from illegal online gambling, which also had a link to China.