Nischal Shetty Says Binance Owns WazirX, CZ Denies it!

Nischal Shetty Says Binance Owns WazirX, CZ Denies it!

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According to Changpeng Zhao, CEO of Binance, the acquisition of troubled cryptocurrency exchange WazirX was “Never Completed.”

The cryptocurrency exchange Binance recently disputed ownership of WazirX, which is situated in India, despite the fact that a blog post published by the business in 2019 stated just the opposite.

In the meantime, WazirX is adamant that the transaction has been successfully finalized.

The disagreement arises in the wake of recent news that India’s Enforcement Directorate (ED) froze $8.14 million (64.67 Crore rupees) in assets belonging to WazirX because the Mumbai-based company allegedly violated regulations regarding currency trading.

Binance’s creator, Changpeng Zhao, responded to Twitter on the previous Friday to respond to “some inaccurate news” and declare that the company “does not own any equity in Zanmai Labs, the firm operating WazirX.”

In response to an announcement made in 2019 that Binance would be acquiring WazirX, Binance CEO Changpeng Zhao stated that “this transaction was never finalized” and that the business “has never – at any point – owned any shares of Zanmai Labs.”

In November 2019, Binance made the initial announcement that it would be acquiring WazirX in a transaction that was allegedly valued at much to $10 million. The blog post that accompanied the announcement featured an image of the CEOs of both platforms expressing their excitement over the purchase.

At the time, Zhao made the following statement regarding the acquisition of WazirX: “The acquisition of WazirX demonstrates our commitment and dedication to the Indian people and strengthens the blockchain ecosystem in India as well as another step forward in achieving the independence of money.”

It is interesting to note that Zhao has now referred to WazirX as a company that is “owned” by Binance.

For one such event, which took place in April of the previous year, CZ congratulated WazirX on reaching a daily trading volume of over $200 million.

CZ stated in a series of recent tweets that “Binance exclusively provides wallet services for WazirX as a tech solution,” in addition to integrating off-chain transactions in order to save money on network costs.

According to the CEO of Binance, WazirX is in charge of all other parts of the company’s operations, including “user sign-up,” “Know Your Customer” checks, “trading,” and “initiating withdrawals.”

WazirX opposes CZ’s claims

However, contrary to the assertions made by Binance’s CEO, WazirX co-founder Nischal Shetty stated that the acquisition deal had been finalized. The tale was not yet ended.

According to Shetty, Zanmai Labs is a company based in India that he and the other co-founders of WazirX hold. This company has a license from Binance that allows it to operate INR-crypto pairs on WazirX.

Binance, in turn, is responsible for operating the crypto-to-cryptocurrency pairs offered by WazirX and for processing cryptocurrency withdrawals.

Shetty further mentioned that Binance controls the domain name for WazirX and has root access to the AWS servers that are used by the exchange. This allows Binance to keep all cryptocurrency assets and earnings made from cryptocurrency trading.

CZ asserted that Binance made a request to the Indian exchange in February to provide system source code, deployment, and operations. CZ denied having authority over the WazirX systems. According to reports, WazirX declined.

According to Zhao, “WazirX has been uncooperative with us, and it appears that they have been uncooperative with ED as well.”

Later on, he verified that Binance does in fact have ownership over the WazirX domain, and he even revealed that the company could close down WazirX, but it won’t do so “because it affects people.”

As was previously mentioned, “Binance does NOT have control over operations such as “user sign-up,” “Know Your Customer,” “trading,” and “initiating withdrawals.” That is in the control of WazirX’s founding team,” CZ stated further.

 

Structure of ownership for WazirX

An outsider looking in may find the situation confusing; however, in an interview with MoneyControl, Shetty revealed that the acquisition agreement took place when the Reserve Bank of India banned banking services for local cryptocurrency exchanges in India.

Following the removal of the restriction, WazirX needed an Indian business to continue processing rupee deposits and withdrawals.

“That is when they [Binance] proposed, and we obliged, that we use an entity we own and we receive a license from them for processing rupee deposits and withdrawals,” he said. “That is when they [Binance] suggested, and we obliged, that we use an entity we own and we get a license from them for That is how Zanmai was able to acquire the license for WazirX from Binance, and the only person who is allowed to give such a license is the one who owns it. This is evidence that they had already acquired WazirX.

According to Shetty, the cryptocurrency-to-cryptocurrency trading as well as the cryptocurrency deposits and withdrawals that take place on WazirX “are directly owned by Binance,” and this information can be found in the terms and conditions of the website.

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We are able to run the rupee market in India because we have both the appropriate legal document of purchase and a license to do so. It’s simply that we can’t talk about it right now,” Shetty explained, adding that “WazirX as a product and a brand is controlled by Binance.”