Binance allegations 'false & misleading': WazirX

Domestic crypto firm WazirX has said the allegations made by the world’s largest crypto exchange Binance are "false and misleading". The company's statement comes days after Binance gave an ultimatum to Zanmai Labs to stop using Binance Wallets by February 3. 

"WazirX users do not have to be concerned about Binance’s announcement. We have made arrangements to ensure that WazirX’s digital assets are stored in accordance with industry-leading standards. Users can continue to trade, deposit, and withdraw their funds as usual," WazirX said. 

"The allegations made by Binance in their blog are false and unsubstantiated. As far as Binance’s actions are concerned, we are taking the necessary steps to seek recourse and protect our legal rights," it added. 

Binance last week said the relationship between the crypto firm and WazirX was that of tech offering. "Binance has no control over WazirX user funds or any aspect of the WazirX exchange’s operations. Rather, as we do for many individuals and organizations, we provided wallet and related technology services to the exchange’s operator, Zanmai Labs (“Zanmai”), – a service we are terminating," it said. 

Binance also said the company has provided Zanmai wallet services, only as a tech solution for their operations of the WazirX exchange, and the company has "never managed or controlled WazirX's operations, including in relation to users’ assets and user activity."

"On 26 January 2023, we offered Zanmai a choice between retracting the false public statements (and continuing to use our services) or terminating the use of our wallet service. Since Zanmai has refused to clarify their misleading statements, Zanmai has till 3 February 2023 (23:59 UTC) to remove the funds from the accounts that they used for WazirX’s operations," it said. 

In its response on February 3, WazirX had said the transfer of assets to the multisig wallets will be completed "within hours." 

"We have initiated the process of transferring assets to multi-sig wallets, which we expect to be fully completed within the next few hours. Users can continue to trade, deposit & withdraw funds as usual. Your funds are safe with us," it said in a tweet. 

Controversy between Binance and WazirX

The spat between the two crypto firms dates back to August last year, after Binance denied owning WazirX, following an investigation against Zanmai Labs by the Enforcement Directorate over alleged money laundering amidst tightening crypto regulations by the Indian government. 

Binance CEO Changpeng Zhao had last year tweeted, "Binance has never – at any point – owned any shares of Zanmai Labs, the entity operating WazirX.” It must be noted that Binance announced in a blog post on November 21, 2019, that it had acquired WazirX. However, Zhao in a tweet claimed that “this transaction was never completed."

"Binance only provides wallet services for WazirX as a tech solution. There is also integration using off-chain transactions, to save on network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading, and initiating withdrawals," had then said. 

However, Nischal Shetty, co-founder, WazirX, rebuffed claims by Zhao and said the technology, the product, the domain, the brand, and everything was sold by the Singapore-based Zettai to Binance. Zinmai Labs is an Indian arm of Zettai.

"Deal involved Binance Parent entity. After some media reports on Binance structure, we asked about it We were given an ambiguous answer that parent entity is under restructuring It’s been many months, still waiting for Binance Parent entity Can Binance name Parent entity?," Shetty had said in a series of tweets.

"Original deal included sale of WazirX Technology (IP) Same Technology was then licensed to Zanmai by Binance for INR market Post licensing: Binance operates crypto-crypto trading, crypto deposit/withdrawals Zanmai operates INR-Crypto trading, INR deposit/withdrawal," his tweets said.