Binance, the world’s largest cryptocurrency exchange by trading volume, has rejected WazirX’s attempts to shift blame for the loss of $234 million in user funds. Instead, it has called on the Indian exchange to take responsibility for the alleged hack that devastated its customers.
Binance Calls Out WazirX’s Bluff
After weeks of acrimonious finger-pointing, Binance has issued a clarion statement, unequivocally affirming that its ultimately unrealized 2021 acquisition agreement with WazirX in no way pardons the Indian exchanges from safeguarding its users’ assets.
In a detailed blog post, Binance set the record straight on its involvement with WazirX, emphasizing that it has never been involved in the day-to-day operations of the Indian exchange.
“The WazirX team and Nischal Shetty continue to mislead WazirX customers and the market regarding the relationship between WazirX and Binance,” the blog post wrote.
The statement starkly contrasted WazirX’s attempts to imply that Binance’s ownership dispute somehow undermines its ability to refund customers’ funds.
By rejecting WazirX’s claims, Binance effectively challenged the Indian exchange to take ownership of its actions and decisions, particularly about the management of user funds.
As Binance pointed out, the security and protection of user assets are fundamental responsibilities of any cryptocurrency platform, and WazirX must be held accountable for its failures in this regard.
“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.”
WazirX Used a Structural Loophole
Binance’s blog post also shed light on WazirX’s true ownership structure, revealing that Zanmai Pvt. Ltd. is the registered owner of the platform with the Indian Financial Intelligence Unit (FIU) and is recognized as such by the Enforcement Directorate.
A closer examination of WazirX’s corporate structure revealed that Zanmai is a subsidiary of Zettai Pte Ltd, a limited liability company registered in Singapore.
Interestingly, Nischal Shetty, WazirX’s CEO, owns ownership stakes in both companies. This structure creates a loophole that shields their assets from potential liabilities.
The ownership structure has also been at the heart of WazirX’s claims that a purported ownership dispute between Zanmai Labs and its parent company has hindered the exchange’s ability to undergo restructuring in India.
However, Binance has called this assertion a “dubious tactic” and a means of deflecting responsibility for the exchange’s failures.
Users Will Never Recover the Full Amount
In a town hall meeting with the community, while addressing questions on chances of fund recovery, WazirX’s legal experts noted that it’s very unlikely that users who lost funds due to the hack will be made whole in crypto terms. According to the lawyers, users will only recover up to 57% of their crypto portfolios.
Final Thoughts
The ongoing conflict between Binance and WazirX over the loss of $234 million in user funds highlights serious accountability issues within the crypto industry. Binance’s statement firmly rejects any responsibility for WazirX’s mismanagement of user assets, pointing out that the Indian exchange should be held accountable for its operational failures.
By emphasizing that Binance never took control of WazirX’s daily activities, Binance shifts the focus back onto WazirX’s structural loopholes and deflective tactics. This public dispute underscores the need for clearer ownership and accountability structures within crypto exchanges, and unfortunately, users who lost funds may never fully recover their investments.
Article Source: CCN
