WazirX founder Nischal Shetty said on Saturday that the company’s deal involves parent Binance.
“Following some media reports about the Binance structure, we asked about this,” Shetty said in a tweet. “We were given a vague answer that the parent company is in the process of restructuring. Still waiting for Binance Parent for months now… Can Binance Parent name the entity?”
1/ We asked about this after some media reports about the Binance parent Binance structure regarding the deal.
— Nischal (Shardeum) ⚡️ (@NischalShetty) 1659791215000
The deal also includes the sale of WazirX technology, he added.
“The same technology was later licensed to Zanmai by Binance for the INR market. After the license: Binance handles crypto-to-crypto trading, crypto deposit/withdrawal. Zanmai handles INR-Crypto trading, INR deposit/withdrawal,” Shetty wrote on Saturday.
Discover the stories you care about
2/ The original deal included the sale of WazirX Technology (IP). The same Technology was later licensed by Binance to Zanmai… https://t.co/gAwyZHOz3N
— Nischal (Shardeum) ⚡️ (@NischalShetty) 1659791217000
Zanmai Labs is the Indian entity that manages WazirX. The Indian venture is 0.01% owned by Shetty and 99.99% by Singapore-registered Zettai Pte Ltd. Zettain’s ownership is split between Shetty, WazirX co-founder Siddharth Menon and Sameer Mhatre.
On WazirX, users have to transfer their funds to Binance, Zhao said.
“We can technologically disable WazirX wallets, but we can’t/won’t,” he tweeted. “And no matter how much controversy we tolerate, we cannot/will not hurt users.”
If you have money in WazirX, you should transfer it to Binance. It’s that simple. We can disable WazirX wallets here… https://t.co/8mNGG1XqUQ
— CZ 🔶 Binance (@cz_binance) 1659734907000
Zhao also tweeted that Binance could shut down WazirX if it wanted to. “But we can’t do that because it hurts users,” he said.
WazirX had over 10 million registered users as of February.
“The WazirX founding team retained control of the platform’s operations,” Zhao wrote. “We (Binance) have never been given data or user control, KYC etc. We would like to work with ED to resolve these issues at WazirX.”
The WazirX founding team retained control of the platform’s operations. We (Binance) never informed or… https://t.co/1yw5Fqm09o
— CZ 🔶 Binance (@cz_binance) 1659734011000
The deterioration of relations between WazirX and Binance comes on the back of the Enforcement Directorate (ED) on Friday, which recently searched the premises of the directors of Zanmai Labs and ordered it to freeze its bank balance of Rs. 64.67 mln.
According to the agency, WazirX “actively” helped 16 fintech companies under investigation for money laundering to divert proceeds of crime using the cryptocurrency route. ET reported on July 6 that the ED is seeking information from many cryptocurrency exchanges under the Foreign Exchange Management Act (Fema). The ED also accused the exchange of having a complex ownership structure.
“Recent allegations regarding WazirX’s operations and how the platform is managed by Zanmai Labs are of ‘deep concern’ to Binance,” CZ said in a statement. He also tweeted that WazirX is not partnered with Binance, nor does it appear to be partnered with ED.