Binance, the world’s largest cryptocurrency exchange by trading volume, has stated that it has no stake in WazirX, just hours after the Enforcement Directorate froze the assets of Sameer Mhatre, a director of Zanmai Lab Pvt Ltd, the company that runs WazirX.
The Enforcement Directorate (ED) announced on Friday that it has frozen Rs 64.67 crore in bank deposits of one of India’s leading cryptocurrency exchanges, WazirX, as part of an ongoing money laundering investigation into some fraudulent smartphone-based loan dishing apps “backed by” Chinese funds.
Here is what we currently know about the WazirX raid and subsequent Binance row.
ED Raids WazirX
The ED said on Friday that it raided Sameer Mhatre, a director of Zanmai Lab Pvt Ltd (which owns WazirX), on August 3 because he was uncooperative with information sought from him. It claimed that the exchange and its executives were giving contradictory and ambiguous answers in order to avoid oversight by Indian regulatory agencies.
According to their Managing Director, Mr. Nischal Shetty, WazirX is an Indian exchange that controls all crypto-crypto and INR-crypto transactions and only has an IP and preferential agreement with Binance.
However, Zanmai now claims that they are only involved in INR-crypto transactions and that all other transactions are handled by Binance on WazirX, the ED stated.
We have been fully cooperating with the Enforcement Directorate (ED) for several days and have fully and transparently responded to all of their inquiries. We disagree with the allegations contained in the ED press release. We are evaluating our next course of action, a WazirX spokesperson told News18 on Saturday.
Binance’s Founder Denies Any Connection With WazirX
Binance founder Changpeng Zhao stated shortly after the news that the company has no ties to WazirX and has no stake in Zanmai Labs. Binance has no equity in Zanmai Labs, the entity that operates WazirX and was founded by the original founders, he said.
Binance disclosed in a blog post on November 21, 2019, that it had acquired WazirX. This transaction never took place. Binance has never owned any shares of Zanmai Labs, the company that operates WazirX “Zhao continued.
WazirX is in charge of all other aspects of the WazirX exchange, such as user sign-up, KYC, trading, and initiating withdrawals, he added, and Binance only provides wallet services for WazirX as a tech solution.
Binance is deeply concerned about recent allegations regarding the operation of WazirX and how the platform is managed by Zanmai Labs. Binance works with law enforcement agencies from all over the world. We would be delighted to collaborate with ED in any way possible, Zhao said.
WazirX Founder Responds to Binance Claim
WazirX founder Nischal Shetty responded to Zhao’s claim on Friday, stating that the platform had been acquired by Binance. Zanmai Labs has a Binance license to operate INR-Crypto pairs in WazirX. He stated. Binance continues to own WazirX, Shetty stated.
Last year, the ED issued a Rs 2,790 crore show cause notice to WazirX for alleged violations of the Foreign Exchange Management Act (FEMA).
