Panic Grips WazirX Users After Binance's CEO Advises Users to Move Funds

"If you have funds on WazirX, you should transfer it to Binance," Changpeng Zhao tweeted.

AccessTimeIconAug 8, 2022 at 9:02 a.m. UTC
Updated May 11, 2023 at 6:47 p.m. UTC
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Changpeng Zhao, the founder and CEO of crypto exchange Binance, has stirred panic among users of WazirX. Zhao said Binance could, it it wanted to, shut down the Indian cryptocurrency platform, and has advised its users to transfers their funds to Binance.

Zhao was denying claims made by WazirX founder Nischal Shetty that the Indian exchange is owned by Binance following a probe by Indian government agencies.

"Binance provides wallet services for WazirX. WazirX domain is transferred to our control. We were given a shared access to an AWS account. We could shut down WazirX. But we can't, because it hurts users," Zhao tweeted.

"If you have funds on WazirX, you should transfer it to Binance. Simple as that."

Users, in turn, flooded WazirX's Telegram channel asking if this was true, whether their funds were safe and whether the exchange's native coin, WRX, would be delisted by Binance. WRX is down over 12% since Friday currently priced at 25 cents, according to CoinMarketCap data.

"In light of recent events about WazirX, we wanted to assure you that operations are being conducted as normal," WazirX responded on Telegram.

WazirX Vice President Rajagopal Menon also tried to quell fears, stating, “We are the only large crypto exchange that allows complete withdrawals of cryptos in India and that shows how solvent we are and how sensible our business model is. Indian rupee (INR) withdrawals are working, and there is no issue in terms of the structural viability of the company. Users crypto is safe.”

Twitter spat

Zhao's comments came after India's Enforcement Directorate (ED) raided the properties of WazirX director and co-founder Sammer Mhatre on Aug. 5. The properties were raided as part of an investigation over alleged fraud on instant loan apps that the crypto platform "actively assisted," according to ED.

India's Ministry of Finance had also said that it was investigating WazirX, alleging the exchange used Binance to disguise transactions.

Binance was believed to be the owner of WazirX, but its CEO denied the claim on Twitter. "Binance does not own any shares in Zanmai Labs, the entity operating WazirX and established by the original founders," Zhao said. Referring to a blog post announcing a proposed acquisition in November 2019, Zhao said the deal was never completed.

Nischal Shetty, however, suggested on Twitter that Zhao was muddying the situation by referring to Zanmai Labs.

"WazirX was acquired by Binance. Zanmai Labs is an India entity owned by me & my co-founders Zanmai Labs has license frm Binance to operate INR-Crypto pairs in WazirX Binance operates crypto to crypto pairs, processes crypto withdrawal," he tweeted.

He said that Binance owns the WazirX domain name, root access to its servers, all its crypto assets and all profits.

"Don't confuse Zanmai and WazirX," he added.

Shetty told CoinDesk in an interview that WazirX has the legal documentation in place to prove that Binance owns WazirX.

At the time of writing, Binance had not responded to CoinDesk's request for clarification on the matter.

UPDATE (Aug. 8 09:38 UTC): Adds penultimate paragraph on Shetty's comments to CoinDesk.


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Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

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