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WazirX Didn't Pass Ownership, Arguments Since 2 Years: Binance

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WazirX Didn't Pass Ownership, Arguments Since 2 Years: Binance
10 Aug 2022
6 min read

News Synopsis

A senior executive from Binance has alleged that WazirX has been delaying giving the company complete control of its assets for the past two years as the dispute between the two parties intensifies. In the future, the international cryptocurrency trading platform won't interact with WazirX, particularly in light of the ongoing Enforcement Directorate (ED) investigation.

Additionally, Binance asserted that ED has not spoken with its teams throughout the probe. Several hours after the ED announced that it would freeze WazirX's bank assets worth over Rs 64 crore after it was allegedly involved in assisting illegal Chinese lending apps make cross-border payments using cryptocurrency tokens through its network, in violation of the Foreign Exchange Management Act, the public dispute between Binance CEO Changpeng Zhao (also known as CZ) and WazirX CEO Nischal Shetty began through a barrage of tweets (FEMA).

Binance will ask Indian users to formally transfer their assets to Binance.com in a soon-to-be-released notice. Currently, WazirX dominates the Indian cryptocurrency trading volume by a margin of just under 50%. "In 2019, when we entered the market, we thought WazirX would be a good partner to enter the market in authentic way. As soon as we sat down to discuss business, problems started to appear. Over the past two years, we have been having hot debate with WazirX to pass ownership to us. That debate continues to this day,” Patrick Hillmann, Chief Communications Officer, Binance apprised.

Regarding timing, he continued, "We learned about the ED inquiry when it was reported in the news. Although ED has not yet contacted our employees, our worldwide investigations team is eager to assist with the inquiry should they do so. Hillmann claims that WazirX was stalling the transfer of the assets while Binance was seeking a complete acquisition.

"We have granted you access to our AWS pass credentials," CEO Nischal Shetty said, but that's not what we meant by ownership. WazirX maintained, owned, and operated all of the operations, marketing, KYC procedures, and actual user databases.

“It’s like they sold us a car, handed us the title and then kept the keys with them. They have been driving the car for the last 2 years. Now the ED has asked them information on what they used the car for and now they are throwing up their hands saying Binance owns the title. Zanmai Labs continue to own and operate WazirX despite us trying to claw back ownership. Nischal’s own website mentions him as the CEO, even after he moved to Dubai. He thinks ED will be dim about this but they are not, sooner or later they will be held accountable,” he added.
 

It's interesting to note that in February 2022, WazirX co-founders Nischal Shetty and Siddharth Menon announced they were leaving their active positions in the business and relocating to Dubai. As the company was also aiming to establish a management team to oversee WazirX, it was claimed that this action was taken to allow Binance to take over operations.
 

 

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