Binance has told customers of its estranged partner WazirX to move their funds to the global crypto exchange platform and said it plans to remove off-chain fund transfer between the services in the latest escalation of tension between the firms over ownership of the Indian startup.
Patrick Hillmann, chief communications officer of Binance, said in a televised interview Monday that the company is aiming to protect the interest of customers by asking them to move their funds to the world’s largest crypto exchange by trade volume.
In a blog post published shortly afterwards, the company said it will cease to support off-chain fund transfers between WazirX and Binance via the “Login with Binance” option on August 11. The feature currently offers a seamless way for Binance and WazirX customers to move their funds between the platforms in real time without having to pay any transaction fees.
Binance is not banning WazirX, so users will be able to deposit and withdraw balances via the standard mechanisms, the company said.
The announcements follow a public spat between Binance and WazirX over the weekend when the companies began to argue about the ownership of the Indian firm.
Binance claims that it doesn’t own WazirX despite both the firms making an acquisition announcement in late 2019. Changpeng Zhao, founder and chief executive of Binance, said in a series of tweets over the weekend that the company has been “trying to conclude the deal for the past few years,” but hasn’t completed the transaction yet citing “a few issues.”
Hillmann likened the situation to a car owner who has sold the vehicle but refuses to hand over the keys. The public spat between the firms emerged after India’s anti-money-laundering agency Enforcement Directorate froze WazirX’s assets worth over $8 million, citing suspected violation of foreign exchange rules.
“Now that the ED has asked them [WazirX] for information on what they were using the car for,” Hillmann told Indian news channel CNBC TV18, continuing his car analogy, “they are trying to throw their hands up and say, look, ‘Binance has the title.’ The reality is that Zanmai Labs [the company that operates WazirX] continues to own and operate WazirX and has for the last two years despite our best efforts to try and claw back ownership of what we thought was going to be a wholesome partnership and acquisition.”
“The whole thing is comical. They may think the ED is dim on this, but they are not. We are quite confident that the ED is going to get to the bottom of this and they [WazirX founders] will be held accountable if they need to be,” he said.
WazirX has disputed Binance’s claims, saying Binance indeed acquired the startup in 2019. The debacle has come as a surprise to the industry, which celebrated the acquisition in 2019 as a watershed moment for the Indian crypto ecosystem.
WazirX is the top crypto exchange by volume. At the height of crypto enthusiasm last year, the firm was processing about $500 million of trades a day, according to a person with direct knowledge of the matter. That number has tumbled to about $5 million, the person said, requesting anonymity discussing private details, as global markets take a downturn and India’s crypto taxation policy goes into effect.
“Moving forward, Binance will support Indian regulators in the ongoing matters concerning WazirX. Binance believes in keeping an open dialogue with regulators, policymakers and the law enforcement community as we collectively seek to establish a global regulatory framework for the industry,” Binance said in a blog post Monday.