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All You Need to Know about Binance and Indian Exchange Wazirx’s Clash

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VOC, Voice of Crypto, Binance

Binance denied partnership with WazirX shortly after India froze its assets. As reported by Voice Of Crypto, on August 5, Indian authorities decided to freeze the assets of WazirX, a domestic crypto exchange, to investigate suspected violations of foreign exchange rules. 

WazirX is a trading platform acquired by Binance, the world’s largest cryptocurrency exchange, in 2019. But on the evening of August 6, Changpeng Zhao, CEO of Binance, sparked controversy with a shocking statement: “Binance never acquired WazirX.”

Accordingly, the CEO of Binance admitted that he had reached an investment agreement with Zanmai Labs, the company behind WazirX, but the equity transfer was never made. CZ also affirmed that the two sides only have a technical support relationship. Binance provides a wallet service for WazirX and helps reduce transaction fees. WazirX controls its exchange management, including user registration, KYC, and deposits.

The Binance CEO wrote that he was “concerned” about reports that authorities were investigating WazirX and how Zanmai Labs was operating the exchange. He pledged to cooperate with Indian authorities on the investigation.

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Binance & WazirX Controversy

Soon after, Nischal Shetty, founder of WazirX, refuted Mr. Changpeng Zhao’s claims. Specifically, this person wrote on Twitter:

Shortly after, the CEO of Binance responded:

Mr. Changpeng Zhao wrote that in the 3 years since signing the agreement, Binance has repeatedly asked WazirX to hand over control, but that has not happened. Binance has chosen not to announce the delay in the deal due to confidentiality provisions.

Mr. Nischal Shetty wrote:

Changpeng Zhao then warned users:

Wazirx Partnership Timeline

Based on the information available to the public

  • In November 2019, Binance announced the acquisition of WazirX. Binance will provide a wallet platform and allow WazirX users to buy crypto with Indian rupees and trade other cryptocurrencies.
  • The agreement also included a provision to transfer management of WazirX to Binance. However, according to CZ’s statement, WazirX only handed over the domain name and access to the AWS server, not letting the exchange control registration, KYC, and withdrawals.
  • During this time, Binance still promotes WazirX in the eyes of the public as a 100% owned platform. Changpeng Zhao also shared articles claiming WazirX as their subsidiary.
  • On August 5, 2022, WazirX was frozen by Indian authorities to investigate allegations of money laundering. CZ stated that he does not control 100% of WazirX operations, the most important aspects are still managed by Zanmai Labs, and they refused to hand them over to him for the past 3 years.

It can be seen that CZ is separating himself and disclaiming his responsibility towards WazirX, asserting no control over user registration, withdrawals, and KYC. The trick used by the world’s largest crypto exchange is to blame Zanmai, the company that sold the ownership of WazirX to them.

Since the beginning of 2022, Binance has been constantly involved in accusations of negligence in customer verification, which aids in money laundering activities with a value of up to $2.35 billion and having “shady” relationships with Russia.

 

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Jim Haastrup is a freelance blockchain and metaverse writer. He helps founders, investors, startups, crypto, and blockchain enthusiasts connect with their audience and win investment through the written word.

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