The CEO of US-based cryptocurrency exchange Binance, Changpeng Zhao, said on August 5 that the business does not own Indian cryptocurrency exchange WazirX, a deal that was reportedly finalised back in 2019.
“Binance does not hold any ownership in Zanmai Labs, the company running WazirX and created by the original founders,” Zhao wrote in a tweet.
Quick thread on Binance and WazirX, and some incorrect reporting.— CZ 🔶 Binance (@cz_binance) August 5, 2022
Binance does not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders.
Zhao, however, claimed that the transaction was never finished, contrary to what was believed to have happened after Binance announced in 2019 that it had bought WazirX in a blog post.
“Binance solely offers WazirX wallet services as a technological solution. Off-chain transactions are also included in order to reduce network fees. All other parts of the WazirX exchange, including as user sign-up, KYC, trading, and initiating withdrawals, are handled by WazirX, he tweeted.
Zhao blamed the failure of both sides to complete the contract to “a few” problems. He said that it is difficult to explain the circumstances surrounding the deal’s failure to conclude.
This comes after the Enforcement Directorate (ED) announced that WazirX’s bank assets worth Rs 64.67 crore have been frozen. The WazirX Director was charged by the central agency for aiding the alleged rapid lending app firms in the acquisition and transfer of virtual cryptocurrency assets used to launder illicit money.
The sum of the agreement in 2019 was not made public by either company. Binance stated that WazirX’s auto-matching engine will be integrated into the Binance Fiat Gateway by the first quarter of 2020 in the blog post announcing the purchase in 2019. The connection would have made it possible for customers of Binance to buy Tether (USDT) using Indian Rupees.
The Rajya Sabha was informed by the Ministry of Finance last week that the ED is looking into two instances involving WazirX in accordance with the 1999 Foreign Exchange Management Act (FEMA). The ministry also stated that Binance’s walled infrastructure was being used by Zanmai Labs, the company that runs WazirX.