Bitcoin News and Finance India Freezes Crypto Exchange Wazirx’s Bank Assets — Binance Claims Acquisition of Wazirx Was ‘Never Completed’ Skip to main content

India Freezes Crypto Exchange Wazirx’s Bank Assets — Binance Claims Acquisition of Wazirx Was ‘Never Completed’

India Freezes Crypto Exchange Wazirx's Bank Assets — Binance Claims Acquisition of Wazirx Was 'Never Completed'

A major Indian cryptocurrency exchange, Wazirx, has had its bank assets of more than $8 million frozen by the Directorate of Enforcement (ED). The exchange was supposedly acquired by Binance in 2019. However, Binance CEO Changpeng Zhao (CZ) now claims that the acquisition was “never completed.” Wazirx, however, maintains that it was acquired by Binance.

ED’s Action Against Wazirx

India’s Directorate of Enforcement (ED) issued a press release Friday concerning Wazirx, a major crypto exchange in India. ED is a law enforcement and economic intelligence agency of the government of India. The announcement details:

Directorate of Enforcement (ED) has conducted searches on one of the directors of M/s Zanmai Lab Pvt Ltd, which owns the popular cryptocurrency exchange Wazirx and has issued a freezing order to freeze their bank balances to the tune of INR 64.67 crore.

ED stated that this action is part of its money laundering investigation against non-bank financial companies (NBFC) and their fintech partners for “predatory lending practices in violation of the RBI [Reserve Bank of India] guidelines.”

The announcement describes: “ED found that large amount of funds were diverted by the fintech companies to purchase crypto assets and then launder them abroad. These companies and the virtual assets are untraceable at the moment.”

ED alleged that Zanmai Labs created a web of agreements with Crowdfire Inc. (USA), Binance (Cayman Island), and Zettai Pte Ltd. (Singapore) “to obscure the ownership of Wazirx.” The authority further claimed that Wazirx gave “contradictory” and “ambiguous” answers “to evade oversight by Indian regulatory agencies,” noting that the exchange failed to provide crypto transactions of suspected fintech companies.

“Because of the non-cooperative stand of the director of Wazirx exchange, a search operation was conducted,” ED stressed. “It was found that Mr. Sameer Mhatre, director of Wazirx, has complete remote access to the database of Wazirx, but despite that he is not providing the details of the transactions relating to the crypto assets, purchased from the proceeds of crime of Instant Loan APP fraud.” The law enforcement agency further alleged:

The lax KYC norms, loose regulatory control of transactions between Wazirx & Binance, non-recording of transactions on blockchains to save costs and non-recording of the KYC of the opposite wallets has ensured that Wazirx is not able to give any account for the missing crypto assets. It has made no efforts to trace these crypto assets.

“By encouraging obscurity and having lax AML norms, it has actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route. Therefore, equivalent movable assets to the extent of Rs. 64.67 crore [$8.14 million] lying with Wazirx were frozen,” the ED announcement concludes.

Binance’s Statements on Acquisition of Wazirx

Having seen media reports of his exchange being mentioned in connection with Wazirx, Binance CEO Changpeng Zhao (CZ) stated on Twitter that his company “does not own any equity in Zanmai Labs.”

Zhao claimed:

On 21 Nov 2019, Binance published a blog post that it had ‘acquired’ Wazirx. This transaction was never completed. Binance has never — at any point — owned any shares of Zanmai Labs, the entity operating Wazirx.

“Binance only provides wallet services for Wazirx as a tech solution. There is also integration using off-chain tx, to save on network fees. Wazirx is responsible all other aspects of the Wazirx exchange, including user sign-up, KYC, trading, and initiating withdrawals,” CZ explained.

“Recent allegations about the operation of Wazirx and how the platform is managed by Zanmai Labs are of deep concern to Binance. Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible,” the Binance boss emphasized.

CZ’s clarification shocked many in the Indian crypto community since they were under the impression that Wazirx is a Binance company.

Clarification by Wazirx’s Founder, Binance’s Warning

In an attempt to clarify the relationship between Wazirx and Binance, Wazirx founder Nischal Shetty insisted on Twitter that his exchange was indeed acquired by Binance.

He added that Zanmai Labs, an entity co-owned by him, has licensed from Binance to operate INR-crypto trading pairs on Wazirx while Binance operates crypto-to-crypto pairs and processes crypto withdrawals.

Asking investors not to confuse Zanmai Labs and Wazirx, he revealed that Binance owns the Wazirx domain name, has root access to its AWS servers, has all the crypto assets, and receives all the crypto profits.

Responding to Shetty’s tweets, CZ confirmed: “We could shut down Wazirx. But we can’t because it hurts users.” He added that Binance does not have operational control, including “user sign-up, KYC, trading and initiating withdrawals,” noting that they are controlled by Wazirx’s founding team. The Binance CEO stressed: “This was never transferred, despite our requests. The deal was never closed. No share transfers.”

CZ further tweeted:

If you have funds on Wazirx, you should transfer it to Binance. Simple as that. We could disable Wazirx wallets on a tech level, but we can’t/won’t do that. And as much debates as we are enduring, we can’t/won’t hurt users.

What do you think about the situation Indian crypto exchange Wazirx is in? Let us know in the comments section below.

Comments

Popular posts from this blog

Custodial Lightning Network Service Attack Discovered by LN ‘Newbie’ — Hacker Strikes 6 LN Custodians

On September 18, a Redditor posted to the r/bitcoin forum and explained how he discovered a way to “attack [the] lightning Network’s custodial services.” The Reddit account dubbed “Reckless Satoshi” wanted to figure out if a “discrepancy between real routing fees and service’s transaction fee can be exploited for a profit.” The researcher disclosed that he wanted to see how large the damage could be and said “it is bad.” 6 Lightning Network Custodial Services Attacked, Researcher Discloses Findings to Offenders Prior to Public Disclosure A Redditor called Reckless Satoshi published a disclosure post on r/bitcoin this past Saturday and disclosed how he had found a vulnerability with routing fees and some of the Lightning Network’s custodial services. The research attack was done in good faith and after it was complete he disclosed the bugs to the offending services before publishing his findings. Reckless Satoshi used the Lightning Network (LN) attack on six different services incl...

Axie Infinity Down 40% Since Last Week’s Price High, Protocol Revenue Outshines Competitors

Last week, the game token leveraged within the Axie Infinity gaming universe skyrocketed to all-time highs, while other crypto markets remained extremely lackluster. During the last seven days, Axie Infinity’s platform token has dropped significantly in value shedding more than 12%. Meanwhile, the game platform’s smooth love potion token has slid over 8% over the last 24 hours. Axie Infinity Down More Than 40% Since All-Time High Not too long ago, the axie infinity (AXS) token was a topical conversation because it reached an all-time high on July 15. At the time, AXS managed to capture $28.93 per unit and since then it has shed 12.8% during the last seven days. The axie infinity (AXS) token is used within the blockchain-based game that involves battles between token-based creatures called “Axies.” AXS is used for the game’s governance system as well as other actions within the game. At the time of writing axie infinity (AXS) is exchanging hands for $16.70 per coin. AXS/USD on Ju...

Play-to-Earn Game From Polker (PKR) Exchange Listing – Endorsed by Akon

The Play-to-Earn NFT based Polker.Game ‘s native token $PKR has been officially listed on the popular centralized exchange BitMart. Polker.game has been in the spotlight recently as Akon, the American R&B superstar and record producer gave his official endorsement of polker stating that the “game is revolutionary” and that Polker is “hands down.. the best play to earn, NFT game in the space.”. With the BitMart listing and celebrity endorsement from Akon, Polker is perfectly positioned to become a major player in the Play-to-Earn league. Watch Akon’s Video Here What is Play-to-Earn? Although not a new concept, play-to-earn has become a trending term due to the popularity of the NFT game AXIE infinity. In the past, previous play-to-earn games have also achieved success – however, thanks to the huge amount of development in the blockchain space in recent years the gaming experience is now massively improved. Play-to-Earn games are essentially free to play and open to anyone and...

China to Crack Down on Copyright Infringement Through NFTs

Authorities in China are going after creators of digital collectibles based on other people’s works of art, the use of which was not authorized. The government offensive is part of a campaign to combat online copyright infringement and piracy with the participation of several departments. Regulators in China Move to Strengthen Copyright Supervision of Online Platforms The National Copyright Administration of China (NCAC) has recently launched a campaign against copyright infringement and piracy on the internet, together with the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Internet Information Office of the People’s Republic. A major objective of the initiative is to improve copyright supervision of online businesses by investigating cases involving the sale and distribution of infringing products on short video, live broadcast and e-commerce platforms, and promptly dealing with infringing content, the agency announced in a press r...
Blogarama - Blog Directory