Binance Denies Ownership of WazirX Amid Cyber Attack Controversy
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Binance hits backs: We never acquired or controlled WazirX, refers to co-founder's "I'm still running WazirX" post - Times of India
Binance - the world's biggest crypto exchange platform has refuted any association with the WazirX hack in July this year. In a blog post, the company said that it "has no responsibility for the operation of the WazirX platform and the consequences of the alleged hack". Stating that Binance is not a party to WazirX's User Agreement, and references to Binance in this Agreement are unauthorized, the company further added "Zanmai/Zettai and their affiliates accept that they still operate WazirX and that Binance was not involved in the operation of WazirX or the compromised wallet at the time of the attack." The post goes on to further state that Zanmai Labs Pvt Ltd (a company incorporated in India) is the legal entity that registered the WazirX platform with the Indian FIU."India's Directorate of Enforcement, having investigated the WazirX exchange, has stated that Zanmai is the owner of WazirX," it added. On July 18, 2024 WazirX reported that it had suffered a cyber-attack, resulting in the loss of user funds with a market value of around $235 million. The alleged hack precipitated withdrawal requests from WazirX customers that WazirX cannot meet up to this day. "Their responsibility to WazirX users is unrelated to their dispute with Binance. Their attempts to shift responsibility is a disappointing deflection tactic, but it should not distract anyone from the glaring issue to be addressed here: the need for the WazirX team to be held accountable for user funds lost under their management," the blog post stated. Binance denies acquiring WazirX The blog post states that Binance never acquired or controlled WazirX. "While a contract had been signed between the parties, the proposed transaction never closed due to Zettai's failure to perform its obligations. Binance has never owned, controlled, or operated WazirX at any time, including before, during, or after the alleged hack." In its blog post, Binance states that "At all times, Mr. Shetty's (WazirX co-founder and CEO Nishchal Shetty) team retained ownership and control over WazirX. Zanmai, Zettai, and Mr. Shetty accept that they still operate and have always operated WazirX. For example, Mr. Shetty publicly stated on his social media account on 30 September 2023 that 'I'm still running WazirX'." "Mr. Shetty suggests that the outcome of the current dispute between Zettai and Binance may result in a determination that Binance owns WazirX and that this would result in the creditors of Zettai becoming creditors of Binance, with the implication that Binance would be responsible for making WazirX users whole. This is wrong," . What happened in the past In 2019, Binance announced that the crypto exchange has acquired WazirX. Later, Binance CEO Changpeng Zhao in August 2022 said on X (formerly Twitter) that his firm didn't own any equity in WazirX nor did it control its operations. At the recent town hall meeting addressing the $230-million crypto asset theft, WazirX's Nishchal Shetty and his legal advisors stated that Binance controlled most of WazirX parent Zettai's revenues, cash flows, and profits. This arrangement, they claimed, limited WazirX's ability to compensate affected customers using its own financial resources. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.
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Binance detaches itself from any liabilities days after WazirX cyber attack
Global crypto giant Binance has distanced itself from any liabilities originating from a cyber attack on embattled crypto exchange firm WazirX, weeks after another wallet service provider, Liminal Custody, also levelled the blame for the breach on the homegrown crypto exchange. In a blog, Binance clarified that the company does not own or operate WazirX in the country, adding that there was no legal basis for the firm to be liable for claims made against the embattled crypto exchange. Click here to connect with us on WhatsApp It refuted WazirX's claims that the global exchange owns the company, while stating that it does not operate the platform. "While a contract had been signed between the parties, the proposed transaction never closed due to Zettai's failure to perform its obligations. Binance has never owned, controlled, or operated WazirX at any time, including before, during, or after the alleged hack," the crypto platform said. Zettai operates the crypto exchange WazirX in India. In July, a security breach at the company resulted in the theft of over $230 million. This was close to half of the platform's digital assets. More From This Section Samsung sues Indian labour union over strike that disrupted production Motilal Oswal Foundation pledges Rs 130 cr to IIT-B for academic upgrade Brookfield likely to add more to $13 bn it has bet on India infrastructure PDG plans infusing $1 bn for expansion in India amid AI data center boom Salesforce keen on expanding in India, to invest more in Hyderabad, B'luru In 2019, the global crypto platform had announced that it had 'acquired' WazirX. However, it later stated that the acquisition was limited to an agreement to purchase some assets and intellectual property of WazirX. WazirX's user agreement states that Binance offers services on the platform, including peer-to-peer (P2P) transactions. However, Binance has clarified that it does not provide any services on the WazirX platform, adding that the document was incorrect and misleading. "Binance has strongly objected to the unauthorised references to Binance in the WazirX user agreement and demanded that references to Binance be removed from the WazirX user agreement. Yet, Mr Shetty, Zanmai, and related entities, who control WazirX, ignored these demands," it added. Nischal Shetty is the founder and chief executive officer of WazirX. Subsequently, the global crypto company has stated that it would not bear any responsibility for the consequences of the cyber attack. It said that it was not obligated to hold funds of WazirX's users. "Once WazirX users' funds were removed from Binance, Mr Shetty and Zettai selected custody solutions provider Liminal to hold these assets. Binance was not consulted about this arrangement and was not aware of it," Binance said. After the cyber attack, WazirX had blamed its wallet service provider, Liminal Custody, for the cyber attack. Liminal Custody had clarified that its systems were not compromised after the cyber attack was first detected. Also Read WazirX plans restructuring, seeks white knight; users set to lose 43% funds Australia leads world market in crypto ATM growth as kiosks pour in After forensic analysis, WazirX blames wallet provider for crypto heist Premium Legal bind for cryptocurrency investors caught in WazirX's fine print Explore different ways to convert cryptocurrencies into cash
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Binance, the world's largest cryptocurrency exchange, has distanced itself from WazirX, an Indian crypto platform, following a recent cyber attack. The controversy has reignited discussions about the ownership and control of WazirX.
Binance Refutes Ownership Claims
Binance, the global cryptocurrency giant, has strongly denied any ownership or control over WazirX, a prominent Indian crypto exchange. This statement comes in the wake of a recent cyber attack on WazirX, which has brought the platform's ownership into question. Binance CEO Changpeng Zhao took to social media to clarify the company's position, stating, "To be clear: Binance does not own any shares in Zanmai Labs, the entity operating WazirX"
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.The Acquisition Controversy
The controversy stems from a 2019 blog post by Binance, which announced the acquisition of WazirX. However, Binance now claims that this acquisition was never completed. The company has referred to a tweet by WazirX co-founder Nischal Shetty, who stated, "I'm still running WazirX," as evidence that Binance does not control the Indian exchange
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.Cyber Attack and Its Aftermath
The ownership dispute has gained renewed attention following a cyber attack on WazirX. The attack, which occurred recently, has raised concerns about the platform's security and management. In response to these events, Binance has explicitly stated that it bears no responsibility for WazirX's operations, including its security practices and user funds
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.Binance's Stance on Liabilities
Binance has taken a firm stance in detaching itself from any liabilities related to WazirX. The company emphasized that it does not operate WazirX's technology, manage its funds, or have access to its user data. This declaration effectively distances Binance from any potential legal or financial repercussions stemming from the cyber attack or other issues WazirX might face
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Implications for WazirX Users
The ongoing dispute and recent cyber attack have significant implications for WazirX users. With Binance denying any responsibility, questions arise about who is ultimately accountable for the security and management of user funds on the WazirX platform. This situation underscores the importance of transparency in cryptocurrency exchanges and the need for clear communication about ownership and operational control.
Regulatory Scrutiny
The controversy is likely to attract increased regulatory attention in India, where authorities have already been closely monitoring cryptocurrency exchanges. The lack of clarity regarding WazirX's ownership and the recent security breach may prompt regulators to take a closer look at the operations of crypto exchanges in the country, potentially leading to stricter oversight and regulations in the future.
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