The biggest cryptocurrency exchange in the world said in a blog post on Friday that WazirX would no longer utilize its wallet services as a result of misrepresentations made about their partnership by Zanmai Labs, the company behind the Indian crypto exchange.
According to Binance, they gave Zanmai the option of discontinuing the partnership or retracting the erroneous public comments and using their wallet services going forward. The exchange also stated that they were ending their cooperation with Zanmai since they had not gotten a suitable answer from Zanmai.
“Since Zanmai has refused to clarify their misleading statements, Zanmai has till 3 February 2023 (23:59 UTC) to remove the funds from the accounts that they used for WazirX’s operations.”
According to Binance, Zanmai has stated a desire to remove the funds from the pertinent accounts. “We have made an exception and encouraged Zanmai to negotiate terms with us for the withdrawal of any assets still present in the relevant accounts after 3 February. The Zanmai team, however, is ultimately in charge of making the withdrawals quickly,” it read.
Reports say after Indian officials started an inquiry into the exchange owing to alleged breaches of foreign currency rules, WazirX co-founder Nischal Shetty and Binance CEO Changpeng Zhao (CZ) engaged in a public Twitter battle regarding who runs WazirX. At that time, WazirX’s funds totaling over $8 million, were frozen by India’s Directorate of Enforcement (ED).
After the investigation, CZ revealed its connection to the Indian cryptocurrency exchange on Twitter. He said that the deal to acquire WazirX was never finalized and that Binance “does not hold any ownership” in Zanmai Labs, the organization running WazirX and founded by the original founders.
The ED also claimed that Zanmai Labs had concealed the ownership of the cryptocurrency platform through a “web of agreements” in a press statement from back in August. Additionally, according to reports, the exchange “failed to publish the KYC of the wallets and give the crypto transactions of the questionable fintech APP firms.”
In the most recent declaration, Binance reaffirmed that it “has no influence over WazirX” and just offers the exchange of a wallet and related technological services.
WazirX published its Proof of Reserves (PoR) at the beginning of January, disclosing wallet addresses and holdings in digital assets. The audit revealed that $26.45 million of the total user assets were kept on exchanges other than Binance, making up around $257.5 million of the total.
At the time, WazirX also said that the PoR data showed the exchange to be India’s largest cryptocurrency exchange by volume and reserves.