As reported by the local media The Economic Times on Monday, Binance plans to eliminate off-chain fund transfers with Indian cryptocurrency exchange WazirX on Aug. 11, though users will still be able to deposit and withdraw balances through the standard deposit and withdrawal process between the two exchanges.
three days before, India’s Control Directorate alleged that WazirX “actively assisted some 16 accused fintech companies in laundering proceeds of crime using cryptocurrencies” and subsequently froze $8.1 million in bank balances related to the exchange.
Simultaneously, there is an ongoing controversy over whether or not Binance owns the exchange. Last Friday, Binance CEO Changpeng Zhao (CZ) said that Binance does not own any stake in WazirX’s parent entity, Zanmai Labs, and cleared up In addition, an alleged acquisition of WazirX by Binance on November 21, 2019 never completed the transaction.
However, in a tweet dated April 5, 2021, Zhao republished the following statement from The Financial Express:
“Binance-Owned Indian Crypto Exchange WazirX Crosses $200M in Daily Trading Volume; Targets $1B in 2021.”
In a similar post, Nischal Shetty, founder of WazirX, he claimed that WazirX was acquired by Binance, with the latter involved in operations such as crypto-to-crypto trading pairs, processing of crypto withdrawals, and the like. Also, Shetty alleged that Binance owned the WazirX domain name, had root access to their servers and controlled all of WazirX’s crypto assets and trading profits.
Binance CEO CZ has strongly denied such claims, stating:
“Binance only provides wallet services for WazirX as a technology solution. There is also an integration using off-chain transactions to save on network fees. WazirX is responsible for all other aspects of their exchange including user registration, KYC , trading and initiation of withdrawals”.
WazirX has been embroiled in a number of controversies in recent times. Last year, the India Control Directorate was already investigating the exchange over allegations of anti-money laundering failures. Earlier this year, officials from the Central Commission for Value Added Taxes (GST) and the Central Commission for Special Taxes recovered funds worth USD 6.62 million of the exchange after detecting the evasion of the GST in the commercial commissions.
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