wazirx: Binance-WazirX ownership fallout sees founders exchange claims and counter-claims

The day after Binance CEO Changpeng Zhao stated that the global cryptocurrency exchange did not own a stake in WazirX’s parent entity, Zanmai Labs, the founders of the two companies got involved in a war of words, exchanging claims and counter arguments on Twitter.

WazirX founder Nischal Shetty said on Saturday that the deal his company struck was about the parent entity of Binance.

“After some media reports on Binance’s facility, we asked about it,” Shetty wrote in a tweet thread. “We have been given an ambiguous answer that the parent entity is undergoing restructuring. Many months have passed, still waiting for the Parent entity of Binance … Can Binance appoint the Parent entity? ”

He added that the transaction included the sale of the WazirX technology.

“The same technology was then licensed to Zanmai by Binance for the INR market. After licensing: Binance handles cryptocurrency trading, cryptocurrency deposits / withdrawals. Zanmai manages INR-Crypto trading, INR deposits / withdrawals, ”Shetty wrote on Saturday.

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Zanmai Labs is the Indian entity that manages WazirX. In the Indian entity, 0.01% is owned by Shetty and 99.99% is owned by Zettai Pte Ltd, a company registered in Singapore. Ownership of Zettai is split between Shetty, WazirX co-founder Siddharth Menon and Sameer Mhatre.

Zhao said users on WazirX should transfer their funds to Binance.

“We could disable WazirX wallets on a technology level, but we can’t / we won’t,” he tweeted. “And no matter how many debates we’re facing, we can’t / won’t hurt users.”

Zhao also tweeted that Binance could shut down WazirX if it so wishes. “But we can’t, because it harms users,” she wrote.

WazirX had over 10 million registered users in February.

“The founding team of WazirX remained in control of the platform’s operations,” Zhao wrote. “We (Binance) have never been given any data or control of users, KYC, etc. We would love to work with ED to fix these issues in WazirX.”

The tightening of the relationship between WazirX and Binance comes in the wake of the Enforcement Directorate (ED) which said on Friday it had recently conducted searches at the directors’ premises of Zanmai Labs and issued a freeze order on its bank balance of Rs. 64.67 million euros.

According to the agency, WazirX had “actively” helped some 16 fintech companies – which are under investigation on a money laundering charge – to divert alleged proceeds from the crime using the cryptocurrency route. ET reported on July 6 that ED is seeking information from multiple cryptocurrency exchanges under the Foreign Exchange Management Act (Fema). The ED also accused the exchange of having a complicated ownership structure.

“The recent allegations about WazirX’s operations and how the platform was operated by Zanmai Labs were of ‘deep concern’ to Binance,” CZ said in a statement. He also tweeted that WazirX has not partnered with Binance and that it appears not to partner with ED as well.

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