India’s FIU Investigates Binance & WazirX Over Suspicious Pakistan-Linked Crypto Transfers

What’s Going On

• FIU is analyzing transaction data from both Binance and WazirX to trace cryptocurrency moving from private wallets linked to Pakistan into unregulated addresses in India.
• The probe zeroes in on transfers matching the criteria for money laundering and potential terror funding.

Why It Matters

• Cross-Border Risk Spotlight: Increased crypto flow in Jammu & Kashmir is raising alarm bells about digital financing of illegal activities.
• Regulatory Crackdown Escalates: WazirX, already entangled in a Singapore court case over asset ownership and restructuring, faces heightened scrutiny as crackdowns loosen the grip marine of trust (turn0search0, turn0search1).
• International Implications: As a globally-accessible exchange, Binance’s involvement signals wider compliance responsibilities and cross-jurisdiction risk.

User Concerns & Calls for Transparency

WazirX users, organized through advocacy groups, demand clarity on several unresolved issues:

• Ownership structure and crypto custody transparency
• Proof of reserves and multi-signature wallet access
• ₹1,284 crore in problematic inter-company transfers
• Unanswered questions around user asset classification via WazirX’s parent Zettai (turn0search0)

Legal Standing

• Singapore's High Court is reviewing cases that may determine whether WazirX users legally own their assets after a ₹2,000 crore hack and failed restructuring plan (turn0search0).
• If FIU findings confirm terror-related crypto flows, the investigation could escalate to India’s Enforcement Directorate or National Investigative Agency.

Final Take

India is raising the stakes in crypto oversight. While Binance and WazirX continue to operate, this high-profile probe tests the industry's risk framework. For global investors, the message is clear: regulation is tightening, transparency matters, and cross-border crypto activity is under the lens.