Confusion Reigns as Binance Disclaims Ownership of the Indian-Based Crypto Exchange, WazirX
- In November 2019, Binance released a blog post announcing its acquisition of WazirX.
- CZ explained that Binance never completed the transaction to acquire the India exchange.
On Friday, August 5, 2022, controversial crypto exchange, Binance, announced that it has no stake in the India-based crypto platform, WazirX. The announcement is a shock to many since it has been over two years since Binance announced its acquisition of the popular Indian-based crypto platform.
In November 2019, Binance released a blog post announcing its acquisition of WazirX, adding a picture of CZ and WazirX founders. The India-based exchange also released another blog post to confirm Binance’s post. Also, on April 5, 2021, CZ tweeted a Financial Times post stating that Binance owned the Indian crypto exchange, WazirX.
A Closer Look at Binance and WazirX
However, on Friday, Binance CEO and founder, Changpeng Zhao (CZ), explained what had transpired in his exchange’s pursuit of taking control of WazirX in a Twitter thread. CZ explained that Binance never completed the transaction to acquire WazirX despite an announcement on November 21, 2019, that it had done so.
He said the transaction would be complete if Binance owned all Zanmai labs shares. Zanmia Labs is the entity behind WazirX operations. Instead, Binance only provides wallet service tech solutions for WazirX. It also helps WazirX with various integrations through off-chain transactions to reduce network fees.
However, the Indian exchange runs other aspects of its business, such as initiation of withdrawals, user sign-ups, KYC, and trading. The Binance CEO also said WazirX has refused to transfer its system source code, deployment, and operations which it even requested in February 2022. Hence, Binance has no control over WazirX systems.
The Binance disclaimer might not be unconnected with recent reports that India’s Directorate of Enforcement (ED) has frozen $8 million worth of digital assets owned by WazirX. ED said the move was necessary as the regulator seeks to complete an investigation of a possible violation of forex policies by WazirX. It is no wonder CZ tweeted that it is of deep concern for Binance to discover the allegations against WazirX about its operations, including how Zanmai labs manage it.
CZ adds that Binance would happily work with the ED in all possible ways. “Binance cooperates with law enforcement agents globally.” He also said, “WazirX has been uncooperative with us, and it’s likely that it won’t cooperate with ed too.” Despite expressing Binance’s readiness to work with law enforcement agencies, ED stated in its order on Friday that Binance seldom responds to requests on its official legal compliance email address.
Trading volume data for Indian crypto exchanges show that WazirX is India’s biggest crypto exchange. Between 2020 and 2021, its transaction volume soared by 1,735 percent hitting $43 billion. The platform also offers its technology as a service for many other India-based exchanges.
A Plot Twist
Meanwhile, one of WazirX’s founders, Nischal Shetty, contradicted CZ’s acquisition disclaimer. Shetty also posted a Twitter thread explaining how Binance owns WazirX. He said WazirX’s TOS page confirms that Binance owns the Indian-based crypto platform, including its domain name. Shetty added that Binance has access to all WazirX’s crypto assets, profits, and AWS servers. Time will tell who is lying among all the parties involved in WazirX ownership.
Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”
