The ED has accused WazirX of aiding 16 Indian fintech firms, which are already under investigation by the agency, by transferring money to undisclosed foreign wallets to aid the proceeds of the crime.
On the other hand, an all-out war has broken out on Twitter between WazirX founder Nischal Shetty and Binance founder Changpeng Zhao.
In a tweet on Friday, Zhao said that the transaction to acquire WazirX was never completed, which Shetty has protested.
According to Shetty, WazirX was acquired by Binance and Zanmai Labs is an Indian entity owned by Shetty and his co-founders. “Zanmai Labs holds a license from Binance to operate INR-Crypto pairs in WazirX. Binance operates crypto to crypto pairs, processes crypto withdrawals…,” Shetty said in a tweet.
Meanwhile, Zhao tweeted on Saturday that if users have funds on WazirX, they should transfer it to Binance. “We can/won’t disable the WazirX wallet on a technical level, but we can’t/will not do that. And with the amount of debate we’re going to endure, we can’t/shouldn’t hurt users,” said Binance founder tweeted.
Namish Shanghvi, crypto entrepreneur and CEO of Coin Crunch India, said, “It is a very complex situation, in the sense that while Binance has access to WazirX, they do not have any equity in Zanmai Labs, which is based on WazirX Crypto. -INR operates. Mandi. It is now the word CZ (Zhao) versus the word Nischal.”
Meanwhile, Kashif Raza, founder of crypto education startup Bitning, also questioned the timing of Binance coming out with a statement that it has no equity in Zanmai Labs, the entity that operates WazirX.
“Why now and why not earlier or later? Why is this statement coming out at a time when the investigation is going on? Now Nischal has also clarified that revenue and profits are also going only to Binance. This industry This is one of the toughest times of the year and this event will not bode well for the overall growth of this industry.”
Amidst the confusion, some experts have become cautious.
“Amidst all this chaos, how can a user trust an exchange where the founder and its owner are having an open battle on Twitter,” one cryptocurrency expert said on the condition of anonymity?
Meanwhile, WazirX said in a statement that deposits and withdrawals on the exchange are currently working as usual.
“We have been cooperating fully with the Enforcement Directorate (ED) for several days now and have answered all their queries in a complete and transparent manner. We do not agree with the allegations in the ED press release. We are evaluating our future course of action,” the statement said.
Meanwhile, Shetty on Saturday assured users that crypto and rupee deposits on WazirX are safe.
In the past too, WazirX has stated that investors will not lose custody of their tokens, as they are stored in a separate custodial wallet. “We are a transaction execution platform that has no control over clients’ assets. Therefore, investors have exclusive rights, title and ownership of their cryptocurrencies, subject to section 9.2 of our Platform’s Terms of Service,” WazirX told Mint. Told earlier.
On users’ funds being affected by ED freeze, Sanghvi said, ‘It’s only’ 64 crores, it seems too little for users to have money. can be at least 200 crore- 250 Cr in deposits on WazirX.”
However, some experts are cautious.
“The withdrawal of rupees for customers is going on, but I do not know how long it can continue. Based on the media reports, it seems that the ED has not frozen all the accounts. If a large number of withdrawals start taking place, there could be a situation where users could be affected,” said Ajit Khurana, founder of Reflexical, a Web 3.0 company and a global crypto consultant.
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