Sameer Hanuman Mhatre Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)
SAFEMA Tribunal Sets Aside PMLA Freezing Orders Against WazirX and Vauld, Remands Matter for Fresh Adjudication
The Appellate Tribunal under SAFEMA set aside the Adjudicating Authority’s order permitting the retention of seized digital devices and continuation of freezing of bank accounts and crypto assets relating to WazirX (Zanmai Labs Pvt. Ltd.), its director Sameer Hanuman Mhatre, and Flypvolt Technology Pvt. Ltd. (Vauld) in connection with the ED’s investigation into the Chinese Instant Loan App scam. The Tribunal held that the Adjudicating Authority had failed to pass a reasoned or speaking order and had not adequately examined the rival contentions before allowing the ED’s applications under Section 17(4) of the PMLA.
The Tribunal observed that while the ED alleged that proceeds of crime generated through illegal loan applications had been routed through cryptocurrency platforms, the appellants consistently maintained that they merely operated cryptocurrency exchange platforms facilitating transactions between users and were not involved in the scheduled offences. Important issues—including whether the frozen funds and crypto assets actually represented proceeds of crime, the ownership of assets lying in pooled wallets, the extent of the exchanges’ control over those assets, the intermediary role of the platforms, and the impact on genuine third-party customers—had not been examined by the Adjudicating Authority.
Holding that these factual and legal questions required detailed adjudication, the Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for fresh consideration. Both parties were directed to appear before the Adjudicating Authority on 21 August 2026, which was instructed to conclude the proceedings within 180 days by passing a reasoned speaking order after considering all evidence and submissions.
Cases Discussed
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
By these appeals under section 26 of Prevention of Money Laundering, 2002 (in short “the Act of 2002”), a challenge has been made to the order dated 27.01.2023 passed by Adjudicating Authority allowing the OA No.726/2022 and OA No.727/2022 filed under section 17(4) of the Act of 2002.
