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Binance and WazirX CEOs Agree To Mitigate Conflict, Investors Experience Relief

Written by: Elena R

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Elena R

Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

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Aug 12, 2022

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Last week, the Enforcement Directorate (ED) commenced an investigation on one of the directors of Zanmai Labs Pvt Ltd and froze Rs. 64.47 Crore worth of bank assets belonging to the company.

The situation continued to worsen from here. Binance removed the off-chain crypto transfer to WazirX, which was a sought-after feature amongst the users. Additionally, Binance seemed to be denying the fact that it owns WazirX amid the turmoil- a matter which was supposedly closed and completed back in 2019.

According to sources, nine crypto exchanges, including WazirX, are allegedly being probed related to Chinese lending applications.

However, disputes and conflicts cannot continue forever. In the latest update, cryptocurrency exchange WazirX and Changpeng Zhao (CZ), founder of binance , may soon come to a resolution over their ongoing ownership issue.

On August 11, New Indian Express reported that the attorneys from both the exchanges are working in close association in an effort to resolve the matter.

Ownership Spat over WazirX operations

Back in November 2019, Binance announced that it had successfully acquired WazirX. It also proclaimed that the 2019 acquisition was restricted to a purchase agreement for certain assets and intellectual property of wazirx .

However, Binance never made any investments in Zanmai Labs in the form of equity. 

However, nischal shetty , Founder and CEO of the Indian exchange WazirX, claimed that the company was purchased by Binance and the WazirX domain name is being controlled by Binance. Shetty said,  “Binance has root access to AWS (Amazon Web Services) servers”.

After the Enforcement Directorate (ED) probe on Zanmai Labs went public, Shetty and changpeng zhao engaged in a public argument with each other on Twitter. 

Shetty said, “Binance operates crypto to crypto pairs, processes crypto withdrawal.”

However, CZ claimed, ‘WazirX’s founding team controls the operations, including user sign-up, KYC, trading, and the initiation of withdrawals. Binance does not have influence over these aspects of the platform.’

“This was never transferred, despite our requests. The deal was never closed,” Cz added,

Patrick Hillmann, chief communications officer of Binance said “As a result of the recent regulatory action taken against Zanmai Labs Pvt Ltd, in relation to their operations of the WazirX Exchange, it has come to our attention that some users were given to believe that funds deposited in WazirX were managed by Binance. This is not the case.” 

This clearly hinted that Binance was trying to ensure that no dirt was thrown on its name because of its relation to WazirX.

Lack Of Communication

Sources report that both Company founders have not spoken to each other since February. 

When WazirX inquired Binance in February regarding the status of the purchase, Binance responded that the parent firm is in the process of restructuring. 

Zanmai Labs Speaks Out 

Zanmai Labs has finally reacted to the recent ED probe against it, stating that it has no affiliation with any users who indulge in illicit activities.

Zanmai Labs stated, “WazirX is a platform co-operated by Zanmai Labs Pvt. Ltd. (Zanmai Labs) and Binance. Zanmai Labs has a no-tolerance policy towards any illegal activities using WazirX.”

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Elena R

Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

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