Binance announced that it has acquired WazirX in a blog post in November 2019
We would be happy to work with ED in any way possible: Zhao on ED raids on WazirX
Finance Minister Nirmala Sitharaman also implicated Binance as a party in the alleged money laundering done by WazirX
In a bolt out of the blue, Binance CEO Changpeng Zhao said on Twitter that the crypto giant never acquired Indian crypto exchange WazirX.
“Binance does not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders,” Zhao wrote.
In a blog post on November 21, 2019, Binance said that it had acquired WazirX. However, the CEO of the crypto exchange said that the deal was never closed and Binance has never owned any shares of Zanmai Labs, the parent company of WazirX.
The Binance CEO also clarified its relationship with the Indian crypto exchange, stating that Binance only provides wallet services for WazirX.
“Binance only provides wallet services for WazirX as a tech solution. There is also integration using off-chain tx, to save on network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals,” Zhao said.
He also expressed Binance’s willingness to support the Enforcement Directorate’s (ED) investigation into WazirX. “Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible,” the Binance chief said.
Zhao’s shocking Twitter thread comes as earlier today, ED froze WazirX’s assets worth INR 64.67 Cr in connection with a money laundering case.
Responding to a Twitter user, Zhao said that there were a ‘few issues’ at WazirX which did not allow Binance to close the deal over almost three years since it announced the acquisition of the Indian crypto exchange.
WazirX has been under the scrutiny of Indian agencies for some time now.
Earlier this week, Union Finance Minister Nirmala Sitharaman informed Rajya Sabha that the ED was investigating two cases against WazirX under the provisions of the Foreign Exchange Management Act (FEMA), the same act that was used to investigate alleged money laundering by the Chinese smartphone maker Xiaomi.
The announcement by Binance is surprising as news reports have been calling WazirX as backed by Binance since November 2019. However, it took ED’s action on the Indian crypto exchange for Zhao to distance himself and Binance from the whole affair.
However, this might not be enough for the Chinese crypto exchange to shake off Indian authorities. Sitharaman mentioned in Rajya Sabha that WazirX used Binance for alleged money laundering and not one crypto transaction between the two exchanges was being recorded on their respective blockchains.
The crypto industry is facing uncertainty in India in the absence of regulatory clarity from the government. However, the Reserve Bank of India (RBI) has made its opposition clear to cryptocurrencies.
Earlier this year, the government also introduced a 30% tax on crypto income and 1% TDS on crypto transactions.
Amid an ongoing crypto winter and the RBI’s call to ban cryptocurrency altogether, the actions of WazirX and Binance could well decide the fate of India’s crypto landscape and the 100 Mn crypto investors in the country.
