wazirx: WazirX, Binance CEOs Clash Over Ownership

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

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

“After some media reports about the Binance structure, we asked about it,” Shetty wrote in a tweet thread. “We received an ambiguous response that the parent company is being restructured. It has been many months since we are still waiting for Binance’s parent entity… Can Binance name the parent entity?”

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

Zanmai Labs is the Indian entity that operates WazirX. In the Indian entity, 0.01% is owned by Shetty and 99.99% is owned by Singapore-registered Zettai Pte Ltd, company filings said. 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 technically disable WazirX wallets, but we can’t do that,” he tweeted. “And no matter how many debates we have, we cannot/will not harm users.”

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

WazirX had over 10 million registered users in February.

“WazirX’s founding team maintained control over the platform’s operations,” Zhao wrote. “We (Binance) never got any data or control over users, KYC, etc. We’d love to work with ED to resolve these issues in WazirX.”

The deterioration in the relationship between WazirX and Binance comes at the back of the enforcement directorate (ED) which said Friday it had recently searched the premises of the directors of Zanmai Labs and issued an order to freeze the bank balance of Rs 64 .67 crore.

According to the agency, WazirX has “actively” helped about 16 fintech companies — under investigation on money laundering charges — divert alleged proceeds of crime using the cryptocurrency route. ET reported on July 6 that ED is seeking 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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