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.