Both crypto and betting have been enjoying massive popularity all around the world. The situation is, however, not as rosy in India. The country has been known for its rather strong stance against gambling and the burgeoning digital currency and blockchain ecosystem. Its government has been trying hard to regulate these sectors. The latest casualty of these efforts is Binance, one of the world’s most popular crypto exchanges and brands.
Recently, the Enforcement Directorate, India’s anti-money laundering agency, began a probe into Binance Holdings Limited. The investigation is meant to ascertain whether the crypto exchange had something to do with betting apps. Its executives are currently being investigated.
No official communication is available on the matter. The Enforcement Directory has not commented and representatives from Binance have denied receiving any summons.
“We have always been a proactive player in fighting crime. We comply with regulator requests all around the world and we don’t comment on any specific engagements.”
However, sources close to the matter have shared differing information that points to some messy issues. It will certainly take a bit of time before any of these matters get settled. It is thus bound to reach the public domain soon.
What Caused the Problem?
Blockchain, digital currencies, and the businesses related to them are no stranger to controversy. Binance is no exception. The company was incorporated in the Cayman Islands and has no corporate headquarters. This raised some eyebrows and the exchange has been facing scrutiny. Many countries including India have concerns that digital currencies can potentially be used to facilitate money-laundering, drug trade, and even terrorism.
Binance’s woes in India may have emanated from its involvement with betting apps which are also still facing some troubles themselves. The operators of said betting apps used wallets with WazirX to buy, convert and transfer funds on Binance. There should be a straightforward way of dealing with this but that is, unfortunately, not the case.
As it turns out, Binance failed to take responsibility by collecting the necessary know-your-customer documents from clients in most of the transactions. In addition to that, the crypto exchange also reportedly failed to collect information as required by the Finance Action Task Force (FATF), the global anti-money laundering watchdog.
Now, this may blow over without too many implications. Still, it represents a clear need for further action concerning the regulatory framework. India in particular has a long way to go when it comes to warming up to crypto and betting.