In the crypto industry, as in every other industry, when one starts a trend that seems to be beneficial or has the potential to lead to positive results, others tend to follow it too. This article deals with one such event wherein the Indian exchange WazirX, led on in the footsteps of Binance and tried to adopt its ways. It has also decided to come up with new ways and intermix them with the ways Binance chose for delisting USDC. It is planning on employing BUSD auto-conversion for keeping a track of the USDC, and USDP balances. These are supposed to be done in a 1:1 ratio.
Let’s take a look at WazirX steps for delisting USDC
After thorough consideration, WazirX has come up with a plan to delist coins coin. These coins are therefore supposed to be evicted from the platform and whatever remains of them shall and must be converted into Binance USD stablecoin. This announcement was made by WazirX on a Monday. In this announcement, he further stated that it has put an end to the deposition coins such as USD, Pax dollar, TUSD, etc. It has put an end to it all for good and has decided to adopt the new or to be more specific Binance.
Reasons for introducing BUSD to users
It is obvious that when something goes on in the crypto market, the authorities feel obligated to share the news with the people to help them make informed decisions. The main reason for the introduction of BUSD stablecoin is primarily to give liquidity a little more boost up as well as help users are more capital efficient. It is also planning upon applying this technique to convert the balance that is already existing in the account of the users.
The authorities have further stated that the users can be able to see their stablecoin only in the account that is under BUSD. It is to be done after the conversion is fully completed. The Indian exchange assets, WazirX is still tet to reach a decision regarding the list of stablecoin that is appropriate for conversion.
What are its plans with another stablecoin?
To shed further light upon this aspect it has also been stated that the withdrawal related to USDC, USDP, etc shall exist there on the WazirX for a very few days. After a period of a few days, this stablecoin shall permanently be delisted from their spot trading pairs. There have been various reports that have suggested in what way WazirX used to handle USDC. It has already delisted several stablecoins and the only surviving one includes, USDC trading against Tether, which is there on the platform.
However, when compared between the two one can see that BUSD is present on the WazirX platform, in not only one but two pairs. Thes two parts of BUSD have been trading at the same time, One against USDT stablecoin and the other against the Indian rupee. The amount of total trading volume has been estimated to be around 5,700 to 5,200 dollars.
Conclusion
Before everything, it is important to also undertake the original USDC. It was created by the fintech firm Circular as well as the Coinbase crypto exchange. It has also established itself as one of the most popular stablecoins which are also referred to as the second largest stablecoin. The decision to remove USDC by WazirX has been taken right after Binance published its decision saying that the USDC shall henceforth be eradicated from its platform.
It also stated the same things under the changes that users might expect. Even though the two, Binance and WazirX sound similar in their ways, they are both unrelated to each other which was even made clear properly.
From the start of August, the Indian crypto exchange WazirX has been facing several difficulties. The Enforcement Directorate (ED) is continuing the investigation on the indirect money laundering activity allegedly done by WazirX. On August 3, ED froze WazirX all activities and assets after getting the clue of assisting 16 free loans providing Dapp which are connected with money laundering activity. Now, the controversy regarding the ownership of WazirX caused a mouth-word war between WazirX and Binance. Binance once announced that they ‘acquired’ WazirX. But after the start of the investigation, Binance is reluctant to accept the ownership. Now in between this rift, the crypto investors in WazirX are in trouble with their holdings and assets.
What Is The Matter?
In November 2019, Binance shared a blog post stating that they ‘acquired’ WazirX. Now the CEO of Binance, Changpeng Zhao claimed that the process and transaction had never happened in 2019. The real owner of WazirX is its entity Zanmai Labs. Zhao stated clearly that Binance does not have any ownership or shares in Zanmai Labs, the entity operating WazirX, or any other platform backed by the company.
On the other hand, Shetty stated that Binance is the actual owner of WazirX which acquired it two years ago. According to him, Zanmai Labs is a different entity. This company owned the license to operate INR or crypto pair on WazirX and other activities like cryptocurrency transactions and withdrawal are controlled by Binance.
Replying to this, Zhao said Binance is not the owner of WazirX. It only provides wallet services to Wazirx as a technical solution. Other works like user sign-up, log-in, KYC (Know Your Customer), etc. are operated by WazirX itself.
A photograph is taken on social media where both CEOs are present with smiling faces. In that context, Zhao simply clarified that Binance guided WazirX that how users will buy cryptos with INR, how they can invest in Tether, how they can get access to Binance, etc. as the relation with WazirX is only providing wallet service.
Though, in several reports, it was clear that Binance and WazirX tied up as partners to reach the global community with easy access and a more secure exchange system. But Binance straightly rejected the ownership claim stating a ‘rumor’.
On August 5, ED published its press release. At that time, Zhao started to share a series of tweets rejecting the ownership of WazirX. On the other hand, Shetty shared the past activities between the two companies.
Investors Are In Trouble :
In between this conflict, the investors, who are the users of WazirX, are in trouble. Over 100 million crypto investors are there on the WazirX platform. The financial activities and assets are frozen by ED. Now, all the controls are in the hands of the Enforcement Directorate. It is assumed that no activities will take place during the investigation until its ultimate result. Now, the investors have been stuck in that chaos. Furthermore, it is a crypto crash movement going. Here the investors of WazirX are carrying another risk through this money laundering activity related to the platform.
The Indian Crypto Exchange WazirX is under investigation by the Enforcement Directorate (ED). The exchange company is allegedly charged with several illegal activities. Initially, it was claimed that WazirX is owned by the global crypto exchange platform Binance. But after the charges, Binance rejected the ownership ‘rumors’ and clearly stated that they don’t have any stake or ownership in WazirX! This shocking announcement became one of the greatest concerns in the crypto market. Also, the defender WazirX stated numerous unknown matters regarding the ownership.
Binance vs WazirX :
After rejecting the ownership idea by Binance, the parent company Zanmai Labs is taking the headlines. It is claimed that the real owner company of WazirX is Zanmai Labs, not Binance. Recently, a money laundering investigation is taking place by ED on this crypto exchange company. The ‘rumored’ owner Binance’s founder and chief executive Changpeng Zhao stated clearly that Binance does not have any ownership or shares in Zanmai Labs, the entity operating WazirX, or any other organization under the company.
It seemed that Binance acquired WazirX. But Zhao said that the company published an ‘acquired’ blog post in November 2019. But the process and transaction never happened.
On the other side the founder and executive of WazirX, Nischal Shetty stated, that Binance indeed took ownership of WazirX two years ago. He said Zanmai Labs is a different entity. It has the license to operate INR or crypto pair on WazirX. While other activity like cryptocurrency transaction and withdrawal is operated by Binance itself through the ownership of WazirX. Ultimately, the exchange company WazirX is still acquired by Binance said, Mr. Shetty.
After the statement of Shetty, Zhao shared that Binance does not hold the owners of WazirX, but it provides only wallet services as a technical solution. That means Binance is a service provider of WazirX, not the owner, according to its executive.
Zhao also stated that the other responsibilities such as user sign-up, log-in, KYC (Know Your Customer), etc. are under the control of WazirX. According to him, apart from providing wallet service, no connection is there between Binance and WazirX.
Zhao further said that his company and its team will help ED if needed. The founder is free to connect with the investigation. Even he proposed ED reach them out for any query.
What Is Happening?
In the last couple of days, WazirX and Binance controversy has been dominating the crypto headlines. ED stopped the WazirX activity after getting the suspect. The enforcement directorate searched on WazirX internal teams. One of the directors of Zanmai Labs was suspected and ED has ceased its bank account. The account had 64.67 crore rupees. ED ordered to freeze the account.
It is charged against WazirX that the exchange company helped 16 fintech companies who are charged with money laundering and illegal activity. Not only indirect money laundering but also, but WazirX was also accused of its complicated unclear ownership structure. Additionally, the company is charged with violating KYC norms and even failing to conduct any enhanced due diligence (EDD).
Other Allegations :
Later it was revealed that WazirX had also issued the transaction record. Most of the transactions were not recorded in its blockchain. Even which bank account is connected or which funds are coming to purchase the assets, are unknown. No records were there. Also, No physical address verification or source checking of funds of the clients are not listed or recorded to the platform.
On the other hand, Binance is a prominent global crypto exchange company. But the controversy between these two renowned companies has sensationalized the crypto market. Both platform users are in a panic.
