Crypto exchange WazirX blacklists over 2,431 accounts. Here’s why

Crypto exchange WazirX said that it has blacklisted more than 2,431 accounts before verifying transactions that were deemed unlawful from October last year to March 2023.

According to a report released by WaxirX on Tuesday, as many as 431 requests were received from law enforcement agencies (LEA), against a total transaction volume of $390 million on the platform during this period. Forty-six requests were from foreign LEAs and 385 requests from Indian LEAs, it said.

WazirX said it has engaged in more than 3,96,126 user interactions during this period. "This report covers an overview of initiatives that the company took during the months of October 2022 to March 2023 to safeguard users in the virtual digital asset (VDA) ecosystem," it said, adding, "It also includes details on requests for user data, content, and account restrictions by Indian and Foreign law enforcement agencies."

All of these requests pertained to matters related to account-blocking, suspected criminal proceedings, investigation, and information was sought from WazirX as to whether such accused had dealt in crypto through our platform.

The crypto exchange said it promptly provided all information as sought, and added, "our compliance rate in record timeliness and accuracy was 100 per cent". Apart from that, blocking of over 2,431 accounts was also initiated based on our internal transaction monitoring process and/or directives from the LEAs.

All requests received from Indian, as well as foreign enforcement agencies, were related to investigations from suspected criminal proceedings.

"Suspension/Blocking of a user's account is subject to our terms and conditions i.e., when there is a violation of policies, deficient or suspicious KYC, or if we notice our platform is being used for illegal activities, we suspend/block the account of the user," the report said.

WaxirX on monitoring abnormal transactions

WaxirX said it also has systems to monitor abnormal transactions done by users, flag their related accounts and identify other suspicious behaviour so that these transactions can be reported to LEA if deemed fit. "Our compliance rate has been 100% for providing information/records to LEAs and also for abiding by their directives," it said.

The recommended statutory Turnaround Time (TAT) for responding to LEA requests is up to 72 hours from the time a request is received. However, with the help of efficient communication channels, WazirX clocked an average TAT as miniscule as 25 minutes for sending the first cut reply.

Some of the Indian and foreign law enforcement agencies that WazirX has worked with during this period are the National Investigation Agency (NIA), Directorate of Enforcement, State Cyber Crime Cells, Odisha Vigilance Department, Special Task Force, Bhopal Police, WB Police, Maharashtra Police, Crime Branch, Toronto Police Department, Police Department Dortmund, New York County District Attorney, Burlington Police, and California Police Department, Florida Police, among others.