Entertainment · August 6, 2022

wazirx: WazirX, Binance CEOs in dispute over ownership

A day after Binance CEO Changpeng Zhao said that the global crypto exchange had no stake in Zanmai Labs, WazirX’s parent company, the founders of the two companies were locked in a war of words, exchanging claims and counterclaims on Twitter.

WazirX founder Nischal Shetty said on Saturday that the deal his company struck affected Binance’s parent company.

“After some media reports about Binance’s structure, we asked about it,” Shetty wrote in a tweet thread. “We have been given an ambiguous answer that the parent company is in the process of restructuring. It’s been many months, I’m still waiting for Binance’s parent entity… Can Binance name the parent entity?

He added that the transaction involved the sale of WazirX technology. “The same technology was then licensed to Zanmai by Binance for the INR market. Post-licensing: Binance operates crypto-crypto trading, crypto deposits/withdrawals. Zanmai operates INR crypto trading, INR deposit/withdrawal,” Shetty wrote on Saturday.

Zanmai Labs is the Indian company that powers WazirX. The Indian entity is 0.01% owned by Shetty and 99.99% owned by Singapore-registered Zettai Pte Ltd, company filings say. Zettai’s ownership is split between Shetty, co-founder Siddharth Menon and Sameer Mhatre, a source said.

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Zhao said that WazirX users should transfer their funds to Binance. “We could disable WazirX wallets on a technical level but we cannot/will not do that,” he tweeted. “And no matter how much debate we endure, we cannot/will not harm users.”

Zhao also tweeted that Binance could shut down WazirX if it wanted to.

WazirX had more than 10 million registered users as of February.

“The founding team of WazirX retained control of the operation of the platform,” Zhao wrote. “We (Binance) were never given any data or control over users, KYC etc. We would like to work with ED to fix these issues in WazirX.”

The deteriorating relationship between WazirX and Binance comes after the back of the Enforcement Directorate (ED), which said on Friday that it recently conducted searches at the Zanmai Labs directors’ premises and issued an order to freeze their bank balances of Rs 64.67 Millions.

According to the agency, WazirX had “actively” helped around 16 fintech companies under investigation for money laundering to divert alleged proceeds of crime via the cryptocurrency route. ET reported on July 6 that ED is collecting information from multiple crypto exchanges under the Foreign Exchange Management Act (Fema). The ED has also accused WazirX of having a complicated ownership structure.

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