Binance moves to dissociate self from WazirX over recent allegations

CryptoSlate

Binance founder Changpeng Zhao has denied that the exchange owns any equity in Zanmai Labs, the company behind the Indian crypto exchange WazirX.

The revelation followed India’s Enforcement Directorate’s decision to freeze an account belonging to WazirX over allegations of money laundering.

In the Aug. 5 Twitter thread, Zhao said that Binance did not complete the acquisition of WazirX as claimed by a blog post published on November 21, 2019. CZ said:

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“Binance has never – at any point – owned any shares of Zanmai Labs, the entity operating WazirX.”

He continued that Binance only provides wallet services to WazirX and an integration that uses off-chain transactions to save on network fees. CZ stated that:

“WazirX is responsible (for) all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals.”

Zhao also mentioned that the recent allegations about the operations of WazirX are concerning and do not align with the values of Binance as it collaborates with law enforcement globally.

CZ also stated that WazirX has been uncooperative with Binance. He said Binance had requested the transfer of the WazirX system source code as recently as this February but was rejected.

Zhao advised WazirX users to transfer their funds to his exchange as he “could disable WazirX wallets on a tech level, but we can’t/won’t do that” to not hurt the users, he added.

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As of press time, Binance’s official website still showed the announcement of its WazirX acquisition.

WazirX founder insists Binance bought the exchange

WazirX’s founder Nischal Shetty has insisted that Binance indeed bought the exchange.

Shetty added that Zanmai Labs is an entity owned by him and other co-founders.

According to him:

“Zanmai Labs has a license from Binance to operate INR-Crypto pairs in WazirX, but Binance operates crypto to crypto pairs, processes crypto withdrawals.”

He added that Zanmai and WazirX are two different entities, and Binance owns the WazirX domain name, has access to all crypto assets on the exchange, and gets all the crypto profits.

WazirX’s user agreement showed that Binance offered crypto-related services for the Indian-based exchange.

Meanwhile, Shetty said that all crypto and Indian rupees on WazirX are safe, and the exchange complies with KYC and AML standards.

Indian crypto community in limbo

The conflicting assertions have sparked debate within the Indian crypto community as many wonders why Zhao denies WazirX ownership

CryptoWhale alleged that there are 93 legal documents confirming Binance’s ownership of WazirX, including a user agreement last reviewed on July 1, 2022.

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Author: Oluwapelumi Adejumo


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