Binance Clarifies Ownership and Responsibility Amid WazirX Controversy

By: Eliza Bennet

Binance has recently distanced itself from the ongoing issues surrounding the Indian crypto exchange WazirX. In a statement dated September 17, Binance addressed allegations made by WazirX co-founder Nischal Shetty, who suggested that Binance might be partly responsible for the financial losses suffered by WazirX users following a significant hack in July that resulted in the loss of $235 million.

Binance responded by calling these accusations "outrageously misleading" and clarifying that it has never "owned, controlled, or operated WazirX at any time, including before, during, or after the alleged hack." Binance emphasized the need for the WazirX team to be held accountable for the lost user funds under their management.

Clearing the Air

In its detailed post, Binance reiterated that it does not own WazirX, despite earlier negotiations to acquire the Indian exchange. Binance stated, "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." WazirX is currently owned by Zanmai Labs Pvt Ltd, an India-based firm registered with local regulators, and a subsidiary of Zettai, a Singapore-based company owned by Shetty.

Binance also refuted Shetty's suggestion that Zettai's creditors could seek compensation from Binance, adding, "There is no legal basis, in any scenario, to the claim that Binance would be liable for claims against Zettai. Any suggestion of Mr. Shetty to this effect is incorrect." Binance acknowledged that it previously provided tech solutions and support for WazirX but denied any responsibility for the hack, clarifying that Shetty and Zettai chose Liminal as a custody provider without Binance's involvement after WazirX's funds were removed from its platform.

Unresponsive WazirX

Despite attempts to dissociate from the Indian exchange, Binance revealed that WazirX has been unresponsive to its offers of assistance. Binance stated that it has been unable to verify the hack independently because its requests for reports about the attack have gone unanswered. "We have requested the WazirX team to provide us with their reports on the incident including all internal reports as well as the purported report from Mandiant from Aug. 14, 2024, which details the cause of the attack, and verification of the amount and proportion of user funds affected, but these requests remained unanswered," Binance explained.

In conclusion, while Binance has tried to offer support in understanding the hack, it steadfastly denies any ownership, control, or responsibility for WazirX. This move aims to clear up any misconceptions and urge WazirX to take responsibility for their operational failures that led to substantial financial loss for its users.