Should Exchanges be held Accountable for Scams related to Cryptocurrencies?

From wazirx.comWazirX is India’s largest Crypto Exchange and one of the first to endorse the use of cryptocurrencies and ask the government for proper regulation around them. This, in turn, has painted a rosy picture of the company as a proponent of decentralized finance and all its innumerable benefits.However, WazirX was not in the clear before finding out that the infamous Indian Exchange willingly or unwillingly contributed to the smuggling of drugs.It was already on the watchlist of the ED (Enforcement Directorate) after unveiling a money-laundering scheme that involved said Exchange to a great degree. The particular allegation as they have stated involves transferring Rs 2790 crores ($380 million dollars) worth of cryptocurrencies to illegal Chinese online betting applications. China’s recent crackdown on Bitcoin has also fueled illegal methods of obtaining cryptocurrencies to a great extent. WazirX was not the only major Exchange involved in this as wallets from Binance were also being utilized to store these illegally acquired tokens.The ED had supposedly notified WazirX about the show cause notice which would ask them to justify their actions. However, Founder Nischal Shetty, denied that any such notice was provided to the company. This inconsistency in the messaging between the two has been a concerning issue.Not even 2 weeks after the money laundering allegation a new case involving WazirX and an underground drug circuit. The main culprit behind this racket was Makarand Pardeep Adivirkar also know as the “Crypto King” for paying dealers in European countries in Bitcoin via the dark web. Blockchain technology certainly has privacy benefits that can be exploited to incite such acts. Fortunately, this was exposed and the man in question has been put behind bars thanks to the Narcotics Control Bureau (NCB) unit in Mumbai.According to WazirX, they perform strict KYC (Know Your Customer) compliances and…