WazirX Co-founder Nischal Shetty Says Binance Owns WazirX PlatoBlockchain Data Intelligence. Vertical Search. Ai.

WazirX Co-founder Nischal Shetty Says Binance Owns WazirX

Time Stamp: August 8, 2022 12:06 PM

Despite the company’s blog post from 2019 explicitly stating the opposite, cryptocurrency exchange Binance denied owning India-based cryptocurrency exchange WazirX, while WazirX asserts that the transaction has been successfully closed.

The issue comes after news leaked last week that WazirX’s assets totaling $8.14 million (64.67 crore rupees) had been frozen by India’s Enforcement Directorate (ED) because the Mumbai-based company allegedly violated currency exchange laws.

Last Friday, Binance founder Changpeng Zhao posted on Twitter to dispute “some incorrect news” and clarify that “Binance does not own any equity in Zanmai Labs, the company running WazirX.”

Zhao stated that “this transaction was never executed” and that the business “has never – at any point – owned any shares in Zanmai Labs” in response to the 2019 announcement of Binance’s acquisition of WazirX.

An image of the executives from the two platforms expressing their excitement over the deal appeared in the blog post that accompanied Binance’s first announcement of the acquisition of WazirX in November 2019. The deal was allegedly worth up to $10 million.

The purchase of WazirX, according to Zhao at the time, “shows our dedication and commitment to the Indian people and strengthens the blockchain ecosystem in India as well as represents another step toward realizing the liberation of money.”

It’s interesting to note that Zhao now refers to WazirX as “owned” by Binance.

For one such occasion in April of last year, CZ congratulated WazirX on reaching a daily trading volume of $200 million.

But as CZ asserted in a recent series of tweets, “Binance solely provides wallet services for WazirX as a tech solution,” along with incorporating of off-chain transactions to save network fees.

WazirX is in charge of all other areas of Binance’s operations, including “customer sign-up, KYC, trading, and initiating withdrawals,” according to the CEO.

WazirX Contests CZ’s Assertions

However, the tale was far from finished as WazirX co-founder Nischal Shetty claimed that the takeover agreement happened despite Binance’s boss’s claim.

According to Shetty, Zanmai Labs is an organization based in India that he and his fellow co-founders own and is authorized by Binance to run INR-crypto pairs on WazirX.

WazirX uses Binance to manage its crypto-to-crypto pairs and handle withdrawals.

Shetty stated that Binance holds all cryptocurrency assets and trading earnings, owning the WazirX domain name and having root access to the exchange’s AWS servers.

CZ asserted that Binance had asked the Indian exchange for the system source code, deployment, and operational transfer in February while denying having any authority over WazirX technologies. WazirX reportedly declined.

Zhao continued, “WazirX has been uncooperative with us and appears to be uncooperative with ED as well.”

Later, he reaffirmed Binance’s ownership of the WazirX domain and even acknowledged that WazirX may be taken down but wouldn’t “because it damages users.”

“As previously indicated, binance does not have control over activities such as user sign-up, KYC, trading, and initiating withdrawals. That is under the control of Zazirx’s founding team,” CZ said.

More Claims from WazirX

Although the situation may appear convoluted from the outside, Shetty said in an interview that the acquisition deal happened while local cryptocurrency exchanges were subject to a banking restriction imposed by the Reserve Bank of India.

WazirX needed an Indian organization to handle rupee deposits and withdrawals after the embargo was lifted.

“When they [Binance] proposed it, we complied and obtained a license from them to process rupee withdrawals and deposits. This is how Zanmai obtained the WazirX license from Binance, and you can only grant a license if you already possess it. That is evidence that they bought WazirX.

Shetty claims that WazirX’s cryptocurrency-to-crypto trading, deposits, and withdrawals “are directly owned by Binance, and you can find this information in the terms and conditions of the website.”

“We are authorized to operate the rupee market in India by a valid legal instrument of purchase. It’s only that we cannot share it at this time. Binance is the owner of the WazirX product and brand.”

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