Binance, WazirX butt heads amid money laundering probe

Binance is distancing itself from its subsidiary exchange WazirX after the latter’s assets were frozen by Indian authorities last week following a money laundering investigation.

Binance founder and CEO Changpeng Zhao (third from left) and WazirX’s co-founders in 2019. / Photo credit: WazirX

In a series of tweets on Twitter, Binance CEO Changpeng Zhao said that his company “does not own any equity in Zanmai Labs, the entity operating WazirX.”

Despite the acquisition being made public on both Binance’s and WazirX’s websites, Zhao said that the deal was “never complete” and that his company “only provides wallet services to WazirX as a tech solution.”

He added that recent allegations of the Indian crypto exchange are “of deep concern” to Binance, and that the team is willing to cooperate with the relevant agencies about the situation.

Soon after Zhang’s tweets, WazirX co-founder Nischal Shetty responded to dispute the Binance founder’s claims.

“WazirX was acquired by Binance,” Shetty affirmed. He added that Zanmai Labs is an entity owned by himself and other cofounders that uses a license from Binance to operate crypto pairs involving the Indian rupee on WazirX.

Moreover, he revealed that Binance owns WazirX’s domain name, manages the platform’s crypto assets, and takes its profits.

The back and forth comes after India’s Enforcement Directorate (ED) said it had frozen 646.7 million rupees (US$8.1 million) worth of assets on WazirX’s platform last week. The penalty was part of a probe into the exchange’s alleged role in helping instant loan providers launder money using cryptocurrencies.

Founded in 2018 by Siddharth Menon, Sameer Mhatre, and Shetty, WazirX is one of the largest crypto exchanges in India with over 31 million users as of March.

See also: Inside the tsunami of NFTs in India

Currency converted from Indian rupee to US dollar: US$1 = 79.62 rupees.