Binance, one of the world’s largest cryptocurrency exchanges has decided to cease services that it provided to WazirX, an Indian crypto exchange which it once sought to acquire. The move is likely in response to tension between the two parties since Binance pulled its support for WazirX last month after accusing the exchange of fraudulent activity.
Binance is warning its users that Zanmai, the firm that operates the WazirX exchange, has not withdrawn assets stored in the Binance wallets despite being made aware of the changing terms. This could lead to their theft if they are not vigilant.
Zanmai is adamant that Binance has not done anything to deserve its treatment, and is accusing the larger firm of orchestrating a smear campaign in order to gain an advantage. Binance insists that Zanmai’s claims are baseless, and intends to take any necessary action against the fraudulent businesswoman.
On 26 January 2023, Binance announced that it would either retract the false public statements made by Zanmai or terminate their use of its wallet service. Since Zanmai has refused to clarify their misleading statements, they have until 3 February 2023 (23:59 UTG+) to remove the funds from the accounts that they used for WazirX’s operations. This is a serious move by Binance, as Zanmai is arguably one of its biggest competitors and could have had a significant impact on its business if they had been found to be falsifying information.
Some in the crypto community were quick to criticize Binance for not owning WazirX, citing the lack of disclosure as a reason. However, it appears that the two companies have since completed their acquisition and Binance now holds a majority stake in WazirX. This news may come as a relief to some who were concerned about the safety of their investments in the exchange.
The delay of the Binance-Robinhood deal is potentially a cause for concern for investors, as it could leave one of the world’s leading exchanges without a major competitor. Critics have long argued that the lack of competition has caused exchanges to become less solvent and more susceptible to manipulation, although Zhao has disputed these allegations.
Despite the apparent denial from Binance, it seems that the cryptocurrency exchange has acquired the firm. The reason for this is unclear, but it could be because of its unique technological capabilities or because of its promising young team. Whatever the case may be, we will have to wait and see
Binance’s relationship with WazirX is another example of how the exchange uses its technology and infrastructure to power its partnerships with other firms. Binance has arrangements similar to this with numerous other firms, but each operates independently. This allows the exchange to provide a consistent user experience across all of its partnerships, something that may be helpful in attracting new customers.
Binance claims that it did not have any involvement in the WazirX exchange’s operations, and that Zanmai merely provided technical support for the exchange. However, this narrative has been false since the beginning; Binance has been regularly involved in WazirX’s operations and was even granted authority to manage its wallet. This is likely why users’ assets have been endangered multiple times, as Binance was not properly vetting third-party services.
Although it is not clear how the Zanmai team will finalize their withdrawal from Binance, the exchange has invited them as an exception to work out such arrangements. Given that Zanmai is one of the largest projects on Binance and accounts for a significant portion of the firm’s assets, it would be strange if they were immediately pulled from the platform. It remains to be seen whether any arrangements can be made, but for now Zanmai investors are anxiously waiting to find out what will happen next.
The WazirX spokesperson said that the firm has initiated the process of transferring assets to multi-sig wallets, which it expects to be fully completed within the next few hours. This move is significant as it underscores WazirX’s commitment to safeguarding its users’ funds.
Some people are unhappy with the way that Binance andBitfinex have been trading recently, with Bitfinex being accused of rigging the price of bitcoin. However, Binance insists that their customers are not impacted by this dispute.
WazirX has always been an ambitious crypto exchange, looking to processing over $10 billion worth of trades last year. However, the firm is currently embroiled in a dispute with Binance, which has caused its business to suffer. The regulatory environment in India is becoming increasingly hostile for cryptocurrencies and firms such as WazirX are struggling to compete against their rivals.
Some experts say that the rules imposed by India’s government on crypto-based trading may have caused the country’s exchanges to cede a majority of the market to foreign players. While some locals continue to trade on decentralized exchanges, it appears that most of India’s activity is now taking place on overseas exchanges.
The Indian exchanges have seen their stock prices plunge as investors avoid the market in light of the new tax regime. This downturn has caused a significant decline in trading volume, which is an important business line for these platforms.
