Binance has invited Zanmai Labs, the company that operates the Indian crypto exchange WazirX, to work out arrangements for the withdrawal of any remaining assets that are held in Binance wallets, according to a blog post on Friday.
The solution ostensibly puts to rest concerns about what would happen to customer funds if Binance and WazirX ended their collaboration. However, it seems to have further escalated the battle between the two crypto exchanges.
“As an exception, we have invited Zanmai to work out arrangements with us to withdraw any remaining assets in the relevant accounts after [February 3]. However, the responsibility ultimately rests with the Zanmai team to make the withdrawals expeditiously,” Binance said.
In a tweet on Friday at 14:58 UTC, WazirX said:
History of the dispute between Binance and WazirX
The public spat between Binance and WazirX began on August 5, 2022, when Binance CEO Changpeng Zhao said in a tweet that: “Binance does not own any shares in Zanmai Labs, the company that runs WazirX and was founded by the original founders.” Zhao’s comments came hours after India’s Enforcement Directorate searched the property of WazirX director and co-founder Sammer Mhatre the same day on suspicion that the exchange was helping 16 fintech companies launder money.
In the following days, Zhao panicked WazirX users. Zhao said that Binance could shut down the Indian cryptocurrency platform if it wanted to, and advised its users to transfer their funds to Binance.
“Binance is providing wallet services for WazirX. The WazirX domain came under our control. We were given shared access to the AWS account. We could shut down WazirX. But we can’t because it hurts users,” Zhao wrote on Twitter.
“If you have funds on WazirX, you should transfer them to Binance. It’s easy,” he said.
At the time, in an interview with CoinDesk, Nishal Shetty, co-founder of WazirX, refuted Zhao’s claims that he did not control the WazirX exchange. “WazirX is a technology we sold to Binance,” he said. He has legal documents confirming the sale, but he can’t share them, again for legal reasons. “What I really need is a resolution,” Shetty said.
Shetty has spoken to CoinDesk in recent months and said his team has been in talks with Binance for months to resolve the ownership issue.
In the months that followed, WazirX laid off 40 percent of its staff due to macroeconomic factors combined with harsh taxes in India and a cryptocurrency contagion exacerbated by the FTX crash. Given that WazirX later revealed that 90 percent of its users’ assets were stored in Binance wallets, it was unclear how the separation of Binance and WazirX would affect WazirX.
To be continued…
