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The post WazirX Hack News: FIU Launches Probe Into Exchange’s Security Failures appeared first on Coinpedia Fintech News After nearly 7 months, WazirX, one of India’s largest cryptocurrency exchanges, is under intense scrutiny as the Financial Intelligence Unit (FIU) has been ordered to investigate the platform for fraud and security failures. This directive, issued by India’s Ministry of Finance on February 14, 2025, comes months after WazirX suffered a massive ₹2000 crore hack, putting over ₹4500 crore in user funds at risk. Breaking NEWS : India’s Finance Ministry Orders FIU Investigation into WazirX for Fraud! pic.twitter.com/ZUIBAUEVII — Pushpendra Singh (@pushpendrakum) March 7, 2025 Government Cracks Down on Crypto Irregularities The investigation follows a formal complaint filed with the Finance Ministry, prompting Shri Kailash Chand Joshi, Under Secretary (Legal), to escalate the matter. Official documents now task the FIU with uncovering the full extent of WazirX’s alleged fraudulent activities. This move signals stricter enforcement in India’s crypto sector as regulators aim to clamp down on financial misconduct and safeguard investor interests. The hack resulted in significant losses for investors, and nearly 43% of users are likely to lose their funds, with investigations revealing complex hacking techniques and possible internal vulnerabilities. WazirX has been cooperating with authorities but has not yet provided a clear resolution for affected users. Money Laundering Allegations and Binance Connection However, authorities have raised serious concerns over WazirX’s compliance failures. Reports suggest the platform may have facilitated money laundering for fintech firms by failing to enforce proper KYC (Know Your Customer) checks and neglecting to maintain bank account records. The Enforcement Directorate (ED) previously criticized WazirX for weak transaction controls, particularly in dealings with Binance. Adding to its troubles, the exchange’s massive security breach in July 2024—linked to North Korea’s Lazarus Group—exposed significant flaws in its operational safeguards. Investigations revealed discrepancies in transaction data and inadequate wallet security, further raising doubts about the platform’s integrity. Will WazirX Executives Face Legal Consequences? With mounting evidence, speculation is growing that WazirX co-founder Nischal Shetty and key associates could face criminal charges. If the FIU’s probe confirms financial misconduct, severe legal repercussions, including potential jail time, could follow. This case is poised to become a landmark moment in India’s crypto regulation. If wrongdoing is proved, it could lead to stricter rules, tighter oversight, and heightened accountability for exchanges operating in the country. The industry is now watching closely, as the FIU’s findings could reshape the regulations scene for digital assets in India.

South Korea’s Financial Intelligence Unit (FIU) is reinforcing its Anti-Money Laundering (AML) laws to address rising financial crimes involving cryptocurrencies. The Financial Services Commission (FSC) held a key meeting to discuss countermeasures against evolving money laundering techniques. Strict AML regulations now operate at the FIU because financial offenses involving cryptocurrency have increased. A meeting of the AML Inspection Trustee Council at the FIU on March 5th 2025 took place to evaluate AML risk components and create updated AML framework rules. Head Park Kwang of FIU conducted meetings with representatives from 11 institutions which included the Financial Supervisory Service and Ministry of the Interior and Safety and other financial officials for the discussions. The council’s main focus was strengthening regulations to curb illicit transactions facilitated by cryptocurrencies. The FIU identified new money laundering methods, including virtual accounts and unauthorized remittance practices, requiring immediate regulatory intervention. Authorities are developing tailored annual inspection plans to mitigate these risks. The AML Inspection Trustee Council concentrated on refining AML oversight mechanisms to prevent fraudulent activities. Officials discussed strategies to enhance compliance and improve real-time detection of suspicious transactions. A priority remains to ensure uniformity in AML inspections across institutions to eliminate regulatory loopholes. Authorities are aligning these measures with international regulatory efforts. The FIU’s latest initiatives mirror global trends where financial regulators are tightening controls on crypto-related transactions. The focus is on improving AML frameworks to address vulnerabilities that cybercriminals exploit. The FIU is forming a ‘People’s Livelihood Crime AML Joint Response Team’ in collaboration with financial agencies. This team will actively detect and address AML weaknesses, working closely with relevant institutions. Strengthening financial security remains a top objective amid the rise in crypto-related crimes. DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

South Korea's Dunamu challenges FIU over restrictions on new user crypto transfers The operator of South Korea's Upbit crypto exchange, Dunamu, filed a lawsuit on Feb. 27 against the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC), according to the Korean news agency Yonhap. The lawsuit was submitted to the Seoul Administrative Court. It seeks to overturn a three-month suspension imposed on certain Upbit operations and to request a halt to the execution of this suspension. Two days ago, when the partial suspension notice was issued, the FIU also held nine Upbit employees accountable, including the CEO. He received a reprimand and was removed from his role as a compliance officer.

🚨 South Korea's FIU hits #Upbit with sanctions for KYC violations. 👥 📄

South Korea’s Financial Services Commission (FSC) is getting ready to announce its decision on possible sanctions against Upbit. The decision comes after findings that Upbit didn’t fully meet customer verification requirements meant to prevent money laundering. The FSC’s Chairman, Kim Byoung-hwan, stated that the review process would soon wrap up , addressing concerns about delays raised by lawmaker Kim Jae-seop. During a National Assembly session, Chairman Kim assured the public that the FSC is working to resolve the matter quickly, pointing out it could affect market dynamics. He clarified that the review process has taken longer than initially thought because of multiple meetings to gather input from all parties involved. Despite the process taking time, Kim indicated that a resolution would be reached soon, given the possible effects for the crypto market in South Korea. Related: South Korea Accelerates Crypto Regulations as U.S. Policies Shift The Financial Intelligence Unit (FIU) conducted an inspection as part of Upbit’s application to renew its virtual asset service provider (VASP) license and discovered several suspected breaches of anti-money laundering (AML) regulations, including problems in the exchange’s Know Your Customer (KYC) procedures. It is common law that financial institutions in South Korea must verify their customers’ identity using government-issued ID cards to prevent illicit activities. However, Upbit’s processes were found to be incomplete, leading to the discovery of hundreds of thousands of suspected violations. Alongside this matter, the FSC has also announced plans to lift the ban on institutional cryptocurrency trading, which has been in place for nearly eight years. This policy shift, planned to happen in two phases throughout 2025, will align with the increasing demand for blockchain-based financial products while keeping in step with global trends. Related: South Korea Reverses Course: Institutions Get Green Light for Crypto Trading From the second half of 2025, organizations such as universities and charities will be permitted to sell crypto donations. Additionally, the FSC will introduce new guidelines to prevent market manipulation, including stronger listing standards and minimum supply requirements for new crypto assets. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.