WazirX Co-Founder Nischal Shetty Speaks Out on Spat With Binance CEO

Shetty said his team has been in discussions with Binance for several months to work out the ownership issue.

AccessTimeIconAug 8, 2022 at 2:54 p.m. UTC
Updated Aug 8, 2022 at 3:57 p.m. UTC

Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

Nischal Shetty, the co-founder of WazirX, rebuffed a number of claims made by Binance CEO Changpeng Zhao over Twitter.

Zhao says Binance does not own WazirX, the target of a money laundering investigation launched by India's Directorate of Enforcement against Zanmai Labs, the Indian entity of WazirX's Singapore parent. That investigation included a raid last week against one of WazirX’s directors.

What started the ownership spat with Zhao? Shetty told CoinDesk he couldn’t comment for legal reasons.

Shetty, however, did rebut Zhao’s claims about not controlling the WazirX exchange. “WazirX is the technology which we sold to Binance,” he said. He has legal documents proving the sale but is unable to share them, again due to legal reasons. “What I really want is a solution,” Shetty said.


The WazirX/Binance relationship, as Shetty claims

The impression created by Zhao's initial tweet last week that Binance does not own WazirX is wrong, claimed Shetty. “The technology, the product, the domain, the brand and everything was sold by our Singapore entity Zettai to Binance,” Shetty said.

Shetty explained the history behind the sale, noting Binance wanted an operational crypto trading presence in India following the 2020 Supreme Court decision that lifted the banking ban on crypto exchanges.

“Post the deal, Binance asked the Indian entity of Zettai – Zanmai Labs – also owned by the same people who created and sold the WazirX tech to Binance, to start the INR [Indian rupee] crypto market in India under Zanmai Labs and gave a license,” Shetty said.

Again noting legal reasons, Shetty says his team cannot show the licensing document to CoinDesk.

Shetty: “Zanmai India has a license to operate the INR market from Binance. How can Binance give [the WazirX tech] as a license if you don't own it? How can I prove it without showing it? Every time an Indian authority comes to us, the license is what we submit and show to explain how we run the market, deposits and withdrawals. We show the license we've got from Binance.”

Shetty stated that Zanmai Labs controls just the crypto market in INR trading, but crypto-to-crypto trading is controlled by Binance.

Shetty’s solution to the ownership spat

Shetty said Binance and his team have “been having discussions for several months” to solve the ownership issue.

“It is absolutely necessary that we need to bring clarity that one party owns WazirX the platform," Shetty said. "So it’s either us owning all of it or them owning all of it. The joint venture is not going to work for a long time. This episode has proven that a JV where an Indian entity does marketing and Binance owns crypto wallets doesn’t work. Our ask is simple, either you take all of it or give it to us."

Many have remarked that the most unfortunate aspect of this online spat is how poorly it reflects on the environment for crypto in India.

“Whenever anything happens in crypto, there will always be fear. And you know, everyone will be worried,” Shetty told CoinDesk. “It's an obvious thing, which is why most of these discussions should always happen behind closed doors and this was happening.”

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Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

CoinDesk - Unknown

Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

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