WazirX told to Withdraw Funds After Falling Out Over its Ownership

Binance has announced the termination of its wallet services for the WazirX Exchange and asked the exchange to withdraw its funds.

In Aug. 2022, Nischal Shetty, the co-founder of WazirX, and Changpeng Zhao, the exchange’s co-founder, had a heated exchange of words over its ownership. Shetty publically tweeted that Binance had acquired WazirX.

Changpeng Zhao argued his firm never completed the transaction to acquire WazirX. The controversy confused investors regarding the ownership of the Indian crypto exchange.

But the controversy took a new turn today as Binance announced it was terminating its wallet services to Zanmai Labs, the parent company of WazirX.

Ties Cut With Zanmai Labs

Binance alleges that Zanmai Labs made false claims about the former controlling its operations. On Jan. 26, they asked Zanmai Labs to retract the false statements or risk losing the wallet services from Binance.

However, the parties did not end up on the same page, and Binance decided to discontinue its wallet services to WazirX.

WazirX Asked to Completely Withdraw Funds From Binance

Binance set a deadline to Zanmai Labs to withdraw all the remaining assets by Feb. 3, but the Indian exchange has not done to fully yet.

According to the WazirX Proof of Reserves (PoR), it has a total holding of USDT 246.31 million. The PoR report released on Jan. 11 revealed that 90% of users’ funds are stored in Binance wallets.

WazirX users are concerned about their funds due to a significant portion stored with Binance. Indian crypto users are already facing challenges of high Tax Deduction at Source (TDS) and a flat 30% tax on crypto gains. According to recent announcements, failure to pay TDS may lead to a spell in jail of up to six months.