Who owns WazirX? What did Binance CEO say? Claims, counterclaims fly as controversy hits crypto platform

WazirX is engulfed in huge controversy. Following raids by the Enforcement Directorate on its parent company Zanmai Lab, a row has kicked off over the ownership of the largest India-based cryptocurrency exchange which had an annual trading volume of over $43 billion in 2021.

The matter was fuelled by the largest crypto exchange in the world, Binance disowning the WazirX. It followed counterclaims by WazirX CEO Nischal Shetty and the dispute continues on Twitter.

It started with Binance founder and CEO, Changpeng Zhao saying that the company "does not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders", in a Twitter thread. 

"On 21 Nov 2019, Binance published a blog post that it had `acquired` WazirX. This transaction was never completed. Binance has never - at any point - owned any shares of Zanmai Labs, the entity operating WazirX," he said. Stating that Binance only provides a tech solution for the crypto platform in the name of wallet services, he said that all other aspects including user sign-up, KYC, trading and initiating withdrawals is the responsibility of WazirX. 

His claim was disputed by WazirX CEO who wrote on the social media platform, “More facts about WazirX: Binance owns WazirX domain name, Binance has root access to AWS servers, Binance has all the Crypto assets, Binance has all the Crypto profits. Don`t confuse Zanmai and WazirX.”

Happy to solve it publicly so everyone is aware. Transparency wins

In this tweet you’re saying you want control of sign ups & KYCs

But that part is run by Zanmai India through a license by Binance

Are you open to closing deal by acquiring Zanmai India then?

Let’s solve it https://t.co/q3LMqFOjc7

— Nischal (Shardeum)  (@NischalShetty) August 5, 2022

Counterstatements have continued into the next day. 

"Sad that these have to be debated on Twitter: Binance provides wallet services for WazirX. WazirX domain is transferred to our control. We were given a shared access to an AWS account. We could shutdown WazirX. But we can't, because..It hurts users. Binance does NOT have control on operations including  "user sign-up, KYC, trading and initiating withdrawals", as stated earlier. WazirX's founding team controls that. This was never transferred, despite our requests. The deal was never closed. No share xfers," Zhao said in a series of tweets

Shetty relied on Saturday to Zhao's tweets. ""We could shut down WazirX” - Proves you have control. “Shared access of AWS” - You have ROOT access of AWS! Anyone with root access controls AWS. “WazirX domain transferred to our control” - Good to see you confirm that. Only control now is Zanmai, why are you not taking it?," he tweeted. 

Zhao hit back saying, "People playing deception wording games. We can shut down the domain. It just hurts users. We do NOT have control of the trading system. You just gave the AWS login, no source code, no deployment capability. You also retained access to the AWS account, source code, deploy, etc."

People playing deception wording games. We can shut down the domain. It just hurts users. We do NOT have control of the trading system. You just gave the AWS login, no source code, no deployment capability. You also retained access to the AWS account, source code, deploy, etc. https://t.co/Zpp6MYlHtp

— CZ Binance (@cz_binance) August 6, 2022

"Fact: we asked for transferring of WazirX system source code, deployment, operations, as recently as  Feb this year. This was refused by WazirX. Binance do NOT have control on their systems. WazirX has been uncooperative with us, and looks like uncooperative with ED as well," he said in another tweet. 

Suggesting a resolution of the ownership confusion, a Twitter user suggested a simple test of who is making majority of the fee money. "Simple test: Who is making majority of the fee money? That’s the owner. Rest is just noise, coverups, workarounds or compliance," he tweeted. 

Shetty replied, "Good question. Binance charges all the fees of Crypto-Crypto trading, Crypto withdrawals. Zanmai India charges INR-Crypto trading fees, INR deposit/withdrawal fees (since it operates WazirX through license obtained from Binance)."

Why did ED raid WazirX?

The ownership row followed ED raids on the director of WazirX on Friday where bank assets worth Rs 64.67 crore were frozen by the agency "for assisting accused instant loan App companies in laundering of fraud money via purchase and transfer of virtual crypto assets”.

On Saturday, WazirX said that it is fully cooperating with ED but does not agree with allegations in the ED press release. 

"We have been fully cooperating with the Enforcement Directorate (ED) for several days and have responded to all their queries fully and transparently. We do not agree with the allegations in the ED press release. We are evaluating our further plan of action," tweeted the cryptocurrency platform.

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(With inputs from IANS)