Binance accuses WazirX of misleading customers after $230 million hack
What's the story
Binance, a leading global cryptocurrency exchange, has accused WazirX and its founder Nischal Shetty of providing misleading information to their customers. This accusation comes in the wake of a recent $230 million hack on WazirX. The controversy centers around the nature of the relationship between Binance and Zettai, the parent company of WazirX. In 2019, Binance announced it had acquired WazirX, but in August 2022, CEO Changpeng Zhao clarified that Binance neither owned equity in WazirX nor controlled operations.
Relationship clarification
Binance denies ownership or control
In a recent townhall meeting, Shetty and his legal team suggested that Binance was the majority stakeholder in Zettai's revenues, cash flows, or profits. They claimed this limited WazirX's ability to compensate its customers independently. However, Binance has refuted these claims in a blog post stating, "Binance has not owned, controlled or operated WazirX at any time." The company further clarified that it never acquired or controlled WazirX.
Accountability call
WazirX urged to take responsibility for user losses
Binance has urged the WazirX team under Zanmai/Zettai to take responsibility for the lost user funds. The company stated that WazirX's obligations to its users are separate from their dispute with Binance. "Their attempts to shift responsibility is a disappointing deflection tactic, but it should not distract anyone from the glaring issue to be addressed here: the need for the WazirX team to be held accountable for user funds lost under their management," Binance stated in its blog post.
Ownership details
Binance highlights Zanmai's legal ownership
Binance highlighted that Zanmai Labs Pvt Ltd, an Indian company, is the legal entity that registered WazirX with the Indian FIU (Financial Intelligence Unit). "India's Directorate of Enforcement, having investigated the WazirX exchange, has stated that Zanmai is the owner of WazirX," Binance added in its blog post. This statement further distances Binance from any direct involvement or control over WazirX and its operations.