WazirX Says Binance Lied About Ownership as Dispute About India’s Largest Exchange Escalates

by | Feb 1, 2023 | Market, Market News | 0 comments

Emails received by CoinDesk have provided additional details on the ongoing conversation surrounding the vague and disputed ownership of WazirX, India’s largest cryptocurrency exchange.

The ownership of WazirX was acknowledged in November 2019 after Binance, the largest cryptocurrency exchange in the world announced that it had possessed the Indian exchange in a blog post. Executives from WazirX spoke publicly about the acquisition. However, when WazirX ran into issues with the Indian authorities last summer, things began to change. In the first few days of August, Indian officials raided WazirX’s Mumbai office on the grounds that the exchange had aided 16 fintech companies in money laundering.

Also Read: WazirX, a cryptocurrency exchange, has released Proof of Reserve to boost transparency.

Binance immediately took action to formally distance itself from WazirX. The Binance blog’s initial acquisition announcement was revised to highlight that the agreement was only for the purchase of particular assets and intellectual property.

However, Changpeng CZ Zhao, CEO of Binance, stated in a tweet on August 5 that the company “does not own any equity in Zanmai Labs, the entity operating WazirX. A representative for Binance reacted to rumours that Binance owned WazirX as a fraud, according to CoinDesk.

A public back-and-forth between WazirX and Binance over who actually owned the Indian exchange ensued, lasting months. During this time, Binance maintained that the transaction never happened, while WazirX officials insisted that it did and claimed to have proof of this, though they never revealed it.

WazirX’s proof, though, was obtained by CoinDesk this week when the dispute was getting heated.

Indian exchange WazirX received a letter from Binance early on January 26—a national holiday in India—in which the company issued two conditions that must be fulfilled by the end of the month or else Binance will cut off its relationship with WazirX by February 3.

Also Read: WazirX follows the footsteps of Binance and delists USDC

First of all, Binance instructed WazirX to repudiate previous states that Binance controlled WazirX by publishing a pre-written “clarificatory statement” that was provided by Binance. WazirX also had to remove any mentions of Binance from its terms of service.

On Friday, Zanmai, who’s really WazirX’s legal name, answered to Binance’s demands in a statement that CoinDesk was able to get. It responded by claiming that the letter of demand was immoral and that it was an effort to use “media pressure and threats to coerce Zanmai into making false and deceptive assertions as clarifications.

Failure to Retract

Shetty refused to retract his earlier claims that Binance had obtained the Indian exchange in the letter to Binance’s CEO and legal team.

In this week’s letter, the company claimed that Zanmai has not made any false or deceptive assertions regarding Binance’s role and responsibilities in administering the WazirX system, and Binance’s control over WazirX’s user assets.  Zanmai granted Binance ownership and control of the WazirX platform.

In the letter, Shetty also claimed that Binance had made significant gains as a result of its control of the exchange.

Binance had unilaterally taken out a significant amount of money (over USD 67 million) that it has accumulated through WazirX selected data, according to Shetty’s email to Binance. Since Binance held the WazirX wallets, these money were transferred to an internal account under its sole control.

Also Read: WazirX And Binance Conflict Leaves The 100 Million Investors In Trouble

To back up his claim, Shetty supplied a chain of emails, some of which were deleted, between Brian Schroder, CEO of Binance US, and Tushar Patel, vice president of finance at WazirX, commencing on July 19, 2021, regarding an altered “share purchase agreement.”

The agreement, dated January 13, 2020, assigns possession of specific WazirX accounts to Binance (the identity of which are redacted in the version CoinDesk reviewed).

The email chain states that WazirX was authorized to continue access[ing] and operat[ing] these accounts for the sole benefit of Binance, who was identified as “the absolute owner(s) of these accounts, under the terms of the agreement.

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