Binance Distances Itself From India’s Crypto Exchange WazirX

Binance CEO Changpang Zhao said Friday his firm never finalized a deal to acquire Indian crypto exchange WazirX, days after the platform was accused of evading oversight by local agencies.

In a tweet thread, Zhao said the November 2019 deal “was never completed” and Binance only provides “wallet services for WazirX as a tech solution.”

“Binance has never — at any point — owned any shares of Zanmai Labs, the entity operating WazirX,” Zhao wrote. “WazirX is responsible [for] all other aspects of the WazirX exchange, including user sign-up, [know-your-customer solutions], trading and initiating withdrawals.”

That’s despite the deal, at the time, having been made public by both Binance and WazirX, which purported to allow users to buy and sell crypto with Indian rupees (INR) via the Binance Fiat Gateway.

WazirX’s co-founder Nischal Shetty has disputed Zhao’s claims, in what’s now a tit-for-tat online feud between the exchange execs.

“WazirX was acquired by Binance,” Shetty tweeted, less than two hours after Zhao had publicly distanced Binance from the exchange. “Binance operates crypto to crypto pairs, processes crypto withdrawal[s].”

Binance and WazirX ties examined by Indian regulators

WazirX has drawn the ire of the Directorate of Enforcement (ED), the country’s financial watchdog, over allegations Zanmai Labs facilitated money laundering on the exchange.

The exchange touts itself as the country’s “largest” crypto exchange with 31.7 million users, about eight million behind another major Indian exchange, CoinDCX’s, which recorded 40 million overall in March.

Binance, the country’s fourth-largest exchange, garners roughly 27.6 million users, according to Business Insider India.

A recent ED investigation has claimed large amounts of funds were diverted from questionable, non-bank financial institutions and their fintech partners to WazirX, which were then laundered abroad.

Domestic Indian publication Business Standard first reported on the investigation.

Regulators have accused Zanmai Labs of creating a “web of agreements” with social media management tool Crowdfire, also founded by Shetty, alongside Singapore holding company Zettai and Binance’s Cayman Islands entity. This was meant to obscure ownership of WarzirX, according to a statement Friday.

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The ED has issued a freeze on Zanmai director Sameer Mhatre’s bank balances worth INR 646,700,000 ($8.1 million) over an alleged failure to cooperate with the agency.

Shetty previously claimed WazirX controls all crypto-crypto and INR-based crypto transactions with only intellectual property and preferential agreement with Binance.

Zanmai Labs now claims it is only involved in INR-based crypto transactions where all other trades are handled by Binance on WarzirX, the agency said in its statement.

WazirX is accused of giving “contradictory and ambiguous” answers to “evade” regulatory oversight from Indian authorities.

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

WazirX and a spokesperson for Zhao did not immediately return a request for comment.

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