Binance CEO says firm never bought WazirX. Its founder disagrees.

Quick Take

  • Binance’s CEO said on Twitter the company never completed the acquisition of WazirX, which it had announced November 2019. 
  • WazirX’s founder refuted that on Twitter saying Binance did buy WazirX.
  • Indian authorities today froze around $8 million in WazirX funds as part of a money laundering investigation.

Binance co-founder and CEO Changpeng Zhao said the company never completed an announced acquisition of WazirX, and that company's founder hit back saying Binance does own WazirX. 

Earlier today, Indian authorities said they had frozen about $8 million in funds belonging to the startup.

“Binance does not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders,” said Binance founder and CEO Changpeng Zhao in a four-part Twitter post today. “On 21 Nov 2019, Binance published a blog post that it had ‘acquired’ WazirX. This transaction was never completed. Binance has never - at any point - owned any shares of Zanmai Labs, the entity operating WazirX.”

Binance only provides wallet services for WazirX, Zhao continued. “There is also integration using off-chain tx, to save on network fees. WazirX is responsible all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals,” he wrote.

Following that post, WazirX founder Nischal Shetty said on Twitter: 

FACTS about WazirX & Binance:

WazirX was acquired by Binance

Zanmai Labs is an India entity owned by me & my co-founders

Zanmai Labs has license frm Binance to operate INR-Crypto pairs in WazirX

Binance operates crypto to crypto pairs, processes crypto withdrawal…

Shetty also wrote on Twitter that Binance owns WazirX domain name, has root access of AWS servers and has all the crypto assets and profits. "Don’t confuse Zanmai and WazirX," he wrote.

India's Enforcement Directorate (ED), an agency that investigates financial crimes, froze bank balances worth 647 million rupees (around $8 million) belonging to WazirX earlier Friday.

ED conducted searches on WazirX co-founder and CTO Sameer Mhatre as part of its money laundering probe against the exchange, according to a statement on Friday. ED has been investigating WazirX since last year for its alleged money laundering role linked to Chinese loan apps that were involved in digital lending in India.

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

A blog post from 2019 announced Binance’s “acquisition of WazirX, India's most trusted bitcoin exchange,” offering users a way to start buying and selling crypto with Indian rupees (INR).

Binance said that starting in 2020, WazirX’s unique auto-matching engine would be integrated into the Binance Fiat Gateway platform, meaning Binance users would be able to place orders to purchase Tether (USDT) against INR.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.