WazirX: Binance Exchange Lied About Ownership, Dispute Soar

• According to WazirX, Binance lied about the former’s acquisition.
• WazirX found itself in trouble with Indian authorities last year.
• These disputes could have devastating effects on the Indian exchange and its users.

Binance, the biggest cryptocurrency exchange in the world, said in a blog post that it had acquired the Indian business WazirX in November 2019, even though the ownership of WazirX was not in question at the time. The top executives of WazirX also discussed the transaction in a forthright manner.

However, the narrative changed last summer when WazirX was in legal trouble with the Indian authorities. WazirX’s headquarters in Mumbai, India, was searched by Indian authorities at the beginning of August on suspicion that the exchange had assisted 16 fintech businesses in money laundering.

Reportedly, Binance wasted little time taking actions that would openly separate itself from WazirX. The blog entry on the Binance website that first congratulated the company on the acquisition was then changed to indicate that the deal was “limited to an agreement to buy specific assets and intellectual property.” 

Additionally, Binance CEO Changpeng “CZ” Zhao said on Twitter on August 5 that the cryptocurrency exchange did not own any shares in Zanmai Labs, the company that runs WazirX.

In the early hours of Jan. 26, the day of a national holiday in India, Binance sent WazirX a letter, according to people familiar with the matter. The letter required the Indian exchange to meet two demands by the end of this month or risk Binance terminating its service agreement with WazirX by Feb. 3.

First, Binance ordered WazirX to post a pre-written “clarificatory statement” refuting co-founder Nischal Shetty’s claims that Binance controlled WazirX. WazirX also had to remove Binance from its terms of service.

Zanmai responded that the demand letter was “unethical” and used media pressure and threats to push Zanmai into making false and misleading statements as ‘clarifications.’ According to experts, these disputes could have a devastating effect on the Indian exchange and its users.

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