WazirX account freeze, ownership mess: Will it affect user funds?

WazirX in a statement has said that currently the deposits and withdrawals on the exchange are working as usual. (AP)

ED has accused WazirX of assisting 16 Indian fintech firms, already under investigation by the agency, in laundering proceeds of crime by transferring the money to unknown foreign wallets

Crypto experts in the country have raised concerns after the Enforcement Directorate froze cryptocurrency exchange WazirX’s bank balances worth ₹64.67 crore and Binance founder denied owning Zanmai Labs, the entity operating WazirX.

ED has accused WazirX of assisting 16 Indian fintech firms, already under investigation by the agency, in laundering proceeds of crime by transferring the money to unknown foreign wallets.

On the other hand, a full-blown war has broken out on Twitter between WazirX founder Nischal Shetty and Binance founder Changpeng Zhao.

Zhao in a tweet on Friday said that the transaction to acquire WazirX was never completed, which has been countered by Shetty.

According to Shetty, WazirX was acquired by Binance and Zanmai Labs is an India entity owned by Shetty and his co-founders. “Zanmai Labs has license from Binance to operate INR-Crypto pairs in WazirX. Binance operates crypto to crypto pairs, processes crypto withdrawal…,” Shetty said in a tweet.

Meanwhile, Zhao on Saturday tweeted that if users had funds on WazirX, they should transfer it to Binance. “We could disable WazirX wallets on a tech level, but we can’t/won’t do that. And as much debates as we are enduring, we can’t/won’t hurt users,” Binance founder tweeted.

Crypto entrepreneur and Coin Crunch India CEO, Naimish Sanghvi, said, “It’s a very convoluted situation, in a sense that Binance owns access to WazirX, but they don’t have any equity in Zanmai Labs, on which WazirX operates the crypto-INR market. It’s now CZ (Zhao) word versus Nischal’s word.”

Meanwhile, Kashif Raza, founder of crypto education startup Bitinning, also questioned the timing of Binance coming out with a statement that it does not own any equity in Zanmai Labs, the entity operating WazirX.

Source: https://www.livemint.com/market/cryptocurrency/wazirx-account-freeze-ownership-mess-will-it-affect-user-funds-11659852457269.html