Changpeng Zhao, the CEO of Binance, has clarified the company’s connection with the Indian crypto exchange platform WazirX whose assets were recently frozen by regional authorities.
Who is telling the truth?
Binance and WazirX were partners, but according to CZ, the former had no ownership stake in the latter’s operator Zanmai Labs.
CZ acknowledged one of Binance’s blog posts from 2019 indicating that the exchange had “acquired” WazirX in a thread on Twitter. He asserted that the deal was “never completed,” nonetheless.
Quick thread on Binance and WazirX, and some incorrect reporting.
Binance does not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders.
— CZ 🔶 Binance (@cz_binance) August 5, 2022
To save consumers money on network fees, he continued, Binance “only” provides an off-chain transaction solution and a wallet service to the Indian exchange. All other aspects of the exchange, such as withdrawals, transactions, and KYC, were the company’s sole domain, according to him.
In contrast, Nischal Shetty, the founder of WazirX, claimed in subsequent tweets that his company’s domain name is owned by Binance, which also controls root access to its AWS servers and keeps all of its crypto assets and gains. “Don’t confuse WazirX and Zanmai,” he continued.
1/ FACTS about WazirX & Binance:
WazirX was acquired by Binance
Zanmai Labs is an India entity owned by me & my co-founders
Zanmai Labs has license frm Binance to operate INR-Crypto pairs in WazirX
Binance operates crypto to crypto pairs, processes crypto withdrawal…
— Nischal (Shardeum) 🔼 (@NischalShetty) August 5, 2022
Additionally, he claimed that Binance acquired WazirX and that it is still controlled by the top exchange in the world. He stated, “Binance operates crypto to crypto pairs [and] processes crypto withdrawals.”
WazirX in trouble
The Enforcement Directorate (ED) of India announced on Friday that it had investigated properties linked to Zanmai Labs director Sameer Mhatre. Several fintech companies were allegedly under investigation by the ED for engaging in money laundering and predatory lending practices. WazirX “actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route,” the report stated.
According to the organization, Zanmai Labs is the real owner of the exchange, but to cover this up, it has established a network of agreements with numerous other companies, including Binance.
While it has occasionally asserted that WazirX manages all exchange-related transactions, at other times, it has implied that Binance is in charge of crypto to crypto transfers.