Binance, the world’s largest crypto exchange by trading volume, said Friday that it does not own India-based platform WazirX, despite announcing the acquisition two and a half years ago in a move that has baffled industry players. including the Indian company insisting that the purchase has taken place.
Changpeng Zhao, founder and chief executive of Binance, said in a series of tweets that the company has “tried to close the deal for the past few years” but has yet to finalize the transaction, citing “a few issues” that it declined to elaborate.
Binance announced the acquisition of WazirX in a blog post in late 2019. The official blog post, featuring a photo of the founders of Zhao and WazirX, also showed the Binance executive’s enthusiasm for the deal.
“The acquisition of WazirX demonstrates our dedication and commitment to the Indian people and strengthens the blockchain ecosystem in India, as well as another step forward in achieving the freedom of money,” the 2019 post quoted him as saying.
WazirX also reported that it was “successfully acquired by Binance” in a separate blog post.
Zhao said Friday that Binance “does not own any shares in Zanmai Labs”, the entity that operates WazirX and was founded by its original founders.
“On November 21, 2019, Binance published a blog post that it had ‘acquired’ WazirX. This transaction was never completed. Binance has never – at any time – owned shares in Zanmai Labs, the entity that operates WazirX,” he wrote.
“Binance only provides wallet services for WazirX as a technical solution. There is also integration using off-chain tx, to save on network costs. WazirX is responsible for all other aspects of the WazirX exchange, including user login, KYC, trading and initiating withdrawals,” he added.
The clarification follows the freeze of WazirX’s assets worth more than $8 million by the Indian Enforcement Directorate, citing a suspected foreign exchange rule violation.
“Recent allegations about the operation of WazirX and how the platform is operated by Zanmai Labs are a major concern for Binance. Binance works with law enforcement agencies around the world. We would love to work with ED in any way we can,” Zhao added.
India’s anti-money laundering agency said in its injunction on Friday that Binance rarely responds to inquiries sent to its official legal compliance email address.
WazirX is the largest crypto exchange in India by trading volume. Annual trading volume exceeded $43 billion in 2021, a “1.735% growth from 2020,” the company said late last year. The platform also offers its technology to several other Indian exchanges.
Nischal Shetty, co-founder of WazirX, has disputed Zhao’s claims, claiming that Binance has indeed acquired WazirX. In a series of tweets, he said:
The public dispute over ownership took an even stranger turn on Saturday. In a tweet, Zhao said Binance asked WazirX to hand over the system’s source code, implementation, and operations in February this year, a request he says WazirX has denied. “Binance has no control over their systems. WazirX did not cooperate with us and does not appear to cooperate with ED,” he added.
Shetty has also since doubled down on his claim that Binance owns WazirX, a claim that Zhao has labeled a “cheating”.
The story has been thoroughly updated with additional details.