- GST officials raided WazirX, and discovered Rs.4.05B in tax evasion.
- WazriX controlled by Binance, Chinese born business domiciled.
- whether WazriX user detail is available to Binance, a Chinese corporation.
Goods & Service Tax (GST) officials raided WazirX, an India-based cryptocurrency exchange that enables users to invest in many cryptocurrencies by trading in fiat currency, discovered accusations of Rs. 4.05B in tax evasion, this happened on December 30, 2021. The US Department of Justice and the US Internal Revenue Service are investigating crypto exchange Binance, a Chinese corporation that owns WazirX, for money laundering and tax evasion.
Furthermore, WazriX controlled by Binance, Chinese born business domiciled in the Cayman Islands. It is a curious case for Indian regulators. Previously unregulated crypto exchanges held by foreign investors and corporations. Because Indian equities, commodities, and fixed income exchanges cannot be entirely owned by foreign entities.
Eventually, China has outlawed cryptocurrency and will launch and regulate its own cryptocurrency namely Digital Yuan. The crypto exchange Binance started in China and now expanded to over 180 countries. And currently, Binance has involved in blockchain-related operations, which includes WazirX in India.
Moreover, since about December 2021, WazirX claims to have 10M+ users. In WazirX, all Indian users need to provide and register through KYC details. Hence, the issue is whether this user detail is available to Binance, a Chinese corporation. Because Binance already has identified for financial crimes in the United States. When WazriX questioned about managing such sensitive user data and whether the data is stored in Binance. It doesn’t give any clarification or answers.
Hence more, what exactly would the government be able to regulate when a foreign company like Binance controls the access, funds, investments, and details of 10M+ Indians operation. This was the million-dollar question that arise commonly. Consecutively, if the government allowed to access all financial transactions made by an Indian buyer or seller via selective KYC and linked bank accounts. There will be no chance of checking the credential detail of the person on the other side transaction. Eventually, there will be no chance to discover the ultimate destination of buyer’s money or to halt the outflow of money from Indian shores.