“Binance does not own any shares in Zanmai Labs, the entity operating WazirX and established by the original founders,” founder and chief executive Changpeng Zhao told ET in response to questions about the ED probe.
Binance is the largest cryptocurrency exchange in the world by volume.
“On November 21, 2019, Binance released a
blog post that he had “acquired” WazirX. This transaction never came to fruition. Binance has never – at any time – held shares of Zanmai Labs, the entity operating WazirX,” Zhao added.
Recent allegations regarding WazirX’s operations and how the platform was run by Zanmai Labs were “of deep concern” to Binance, he added.
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Nischal Shetty, founder and CEO of WazirX, told ET that Binance indeed acquired the crypto exchange two years ago.
“Zanmai Labs is a separate entity that holds a license from WazirX (owned by Binance) to operate the INR/Crypto pair on WazirX. Crypto-to-crypto transactions and withdrawals are operated under Binance through their ownership of WazirX,” Shetty said. .
He added that WazirX “is still owned by Binance.”
Zhao said Binance only provides wallet services for WazirX as a “technical solution”.
“There is also an integration using off-chain transactions to save on network fees. WazirX is responsible for and manages all other aspects of the WazirX exchange, including user registration, KYC (Know Your Customer) and the trading,” he said.
The global crypto exchange works with law enforcement around the world, he said.
“We would be happy to work with ED in any way possible if they contact us,” Zhao added.
ED said on Friday that it recently conducted research on one of the directors of Zanmai Labs and issued an order to
freeze its bank balance of Rs 64.67 crore.
According to the agency, WazirX had “actively” helped about 16 fintech companies – which are under investigation for money laundering – to divert their suspected proceeds of crime using the cryptocurrency route.
ED also accused the exchange of having a complicated ownership structure.