After almost 7 months, Wazirx, one of the biggest exchanges of India cryptocurrency, is under intense control, because the financial intelligence unit (FIU) was ordered to investigate the platform for fraud and security failures. This directive, published by the Ministry of India of Finance on February 14, 2025, occurs months after Wazirx underwent a massive hack of 2000 crores, putting more than 4,500 crore of funds of user in danger.
The government represses cryptographic irregularities
The investigation follows an official complaint filed with the Ministry of Finance, which prompted Shri Kalash Chand Joshi, under-secretary (legal), to intensify the case. Official documents are now trying to FIU to discover the full extent of the alleged fraudulent activities of Wazirx. This decision indicates a stricter application in the Indian cryptography sector, as regulators aim to suppress financial misconduct and protect the interests of investors.
Piracy has led to significant losses for investors, and almost 43% of users are likely to lose their funds, surveys revealing complex hacking and possible internal vulnerabilities. Wazirx has cooperated with the authorities but has not yet provided clear resolution for affected users.
Silver laundering allegations and binance connection
However, the authorities have raised serious concerns about the failures of Wazirx’s compliance. The reports suggest that the platform may have facilitated money laundering for fintech companies by not applying KYC vouchers (know your customer) and neglect to maintain bank accounts. The Application Department (ED) previously criticized Wazirx for weak transaction controls, in particular in relations with Binance.
Adding to its troubles, the massive security violation of the exchange in July 2024 – was linked to the group of Lazarus of North Korea – exposed of significant defects in its operational guarantees. The surveys have revealed differences in transaction data and inadequate safety of the portfolio, which further increases doubts about the integrity of the platform.
Will Wazirx leaders face legal consequences?
With growing evidence, speculation increases that the co-founder of Wazirx, Nischal Shetty and that the main partners could face criminal accusations. If the FIU survey confirms a financial fault, serious legal repercussions, including a potential prison sentence, could follow.
This case is about to become a historic moment in the regulation of India cryptography. If reprehensible acts are proven, this could cause stricter rules, stricter surveillance and increased responsibility for exchanges operating in the country. The industry is now looking closely, because the FIU conclusions could reshape the regulations scene for digital assets in India.
