Key Takeaways
- Binance says it has no connection to WazirX, and its dispute has nothing to do with user funds.
- The exchange called out WazirX for deflecting responsibility and misleading customers.
- WazirX has applied for restructuring in Singapore, citing a Binance dispute.
Binance, the world’s largest cryptocurrency exchange by trading volume, has rejected WazirX’s attempts to shift blame for the loss of $234 million in user funds.
Instead, it has called on the Indian exchange to take responsibility for the alleged hack that devastated its customers.
Binance Calls Out WazirX’s Bluff
After weeks of acrimonious finger-pointing, Binance has issued a clarion statement, unequivocally affirming that its ultimately unrealized 2021 acquisition agreement with WazirX in no way pardons the Indian exchanges from safeguarding its users’ assets.
In a detailed blog post, Binance set the record straight on its involvement with WazirX, emphasizing that it has never been involved in the day-to-day operations of the Indian exchange.
“The WazirX team and Nischal Shetty continue to mislead WazirX customers and the market regarding the relationship between WazirX and Binance,” the blog post wrote.
The statement starkly contrasted WazirX’s attempts to imply that Binance’s ownership dispute somehow undermines its ability to refund customers’ funds.
By rejecting WazirX’s claims, Binance effectively challenged the Indian exchange to take ownership of its actions and decisions, particularly with regard to the management of user funds.
As Binance pointed out, the security and protection of user assets are fundamental responsibilities of any cryptocurrency platform, and WazirX must be held accountable for its failures in this regard.
“Their attempts to shift responsibility is a disappointing deflection tactic, but it should not distract anyone from the glaring issue to be addressed here: the need for the WazirX team to be held accountable for user funds lost under their management.”
WazirX Used a Structural Loophole
Binance’s blog post also shed light on WazirX’s true ownership structure, revealing that Zanmai Pvt. Ltd. is the registered owner of the platform with the Indian Financial Intelligence Unit (FIU) and is recognized as such by the Enforcement Directorate.
A closer examination of WazirX’s corporate structure revealed that Zanmai is a subsidiary of Zettai Pte Ltd, a limited liability company registered in Singapore.
Interestingly, Nischal Shetty, WazirX’s CEO, owns ownership stakes in both companies. This structure creates a loophole that shields their personal assets from potential liabilities.
The ownership structure has also been at the heart of WazirX’s claims that a purported ownership dispute between Zanmai Labs and its parent company has hindered the exchange’s ability to undergo restructuring in India.
However, Binance has called this assertion a “dubious tactic” and a means of deflecting responsibility for the exchange’s failures.
Users Will Never Recover the Full Amount
In a town hall meeting with the community, while addressing questions on chances of fund recovery, WazirX’s legal experts noted that it’s very unlikely that users who lost funds due to the hack will be made whole in crypto terms.
According to the lawyers, users will only recover up to 57% of their crypto portfolios.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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