Binance CEO Gets Into Verbal Spat With WazirX Founder on Twitter After ED Probe

After the Indian Directorate of Enforcement (ED) launched an investigation into crypto exchange WazirX for laundering $350 million (roughly Rs. 2,785 crore) and froze the Binance-acquired Indian crypto startup's assets, Binance CEO Changpeng Zhao tweeted that the transaction to complete the acquisition was never completed. "On 21st November 2019, Binance published a blog post that it had "acquired" WazirX – this transaction was never completed," clarified Zhao. "Binance has never – at any point – owned any shares of Zanmai Labs, the entity operating WazirX."

Nischal Shetty, the co-founder of WazirX, rebutted Zhao's tweeting “WazirX was acquired by Binance. Zanmai Labs is an Indian entity owned by me & my co-founders. Zanmai Labs has a license from Binance to operate INR-Crypto pairs in WazirX. Binance operates crypto to crypto pairs, processes crypto withdrawal.”

Blaming WazirX founders for playing "deception word games” on Twitter, Zhao revealed that Binance asked for WazirX to transfer the system source code, deployment, and operations, as recently as February this year, a request that was refused by WazirX, stated Zhao.

Corroborating on this point, Shetty revealed that the Binance team wanted control of Zanmai [in February 2022]. He said, "Naturally if Binance desires control of Zanmai, they can acquire shares."

According to Binance, although WazirX transferred the domain control to Binance, it never received shared access to WazirX's AWS account or any control over operations including user sign-up, KYC, trading, and initiating withdrawals.

“This was never transferred, despite our requests. The deal was never closed,” Zhao insisted, stating that WazirX's founding team, Nischal Shetty and Siddharth Menon, kept the control in their hands.

Zhao highlighted the fact that Binance only provides wallet services for WazirX as a tech solution. “There is also integration using off-chain tx to save on network fees,” he said. However, he insisted that “WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals.”

Acknowledging the charges against WazirX, Zhao said, “Recent allegations about the operation of WazirX and how the platform is managed by Zanmai Labs are of deep concern to Binance.” He added, “Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible.”

Meanwhile, the spat has caused users to flood WazirX's Telegram channel asking if the allegations levied by the ED were true, whether their funds were safe, and whether its native coin WRX would be delisted by Binance.

“In light of recent events about WazirX, we wanted to assure you that operations are being conducted as normal,” WazirX responded on Telegram.