ED Stance Strikes at the Heart of Cryptocurrencies

The stand taken by the Enforcement Directorate (ED) on cryptocurrencies can unsettle crypto trading and all bourses in India. The agency, in its recent notice to WazirX, has asked the country’s largest crypto exchange to explain why ‘withdrawal from crypto wallets’ is not a violation of the Foreign Exchange Management Act (FEMA), a person familiar with the issue told ET.

The ED notice puts a question mark on the very essence of crypto and fundamental structure of the underling digital ledger, block chain, that allow holders of crypto to freely transfer coins from their wallets to another wallet and to anyone, anywhere in the world. The agency had asked WazirX to explain transaction worth Rs. 790.74 crores. “These were carried out in violation of forex rules. WazirX platform allowed clients to transfer cryptocurrencies without proper documentation, making it a route for laundering,” said an official. S-ET

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