Indian cryptocurrency users are in a pickle as a result of a recent dispute between Binance, the largest cryptocurrency exchange in the world by trading volume, and Indian cryptocurrency exchange WazirX. This is on top of the already battered portfolio of cryptocurrency users caused by a sharp decline in cryptocurrency value and a strict tax regime.
After the Enforcement Directorate (ED), in a statement on August 5, 2022, indicated that WazirX was delivering conflicting and imprecise responses to dodge inspection by Indian regulatory officials, a disagreement between Binance founder and CEO Changpeng Zhou and WazirX founder and CEO Nischal Shetty erupted.
In November 2019, over two years prior, Binance said that it has bought WazirX. After the takeover announcement, neither Binance nor WazirX made any other statements on the situation, which led to the widespread belief that Binance had actually bought WazirX.
Zhao, however, disassociated Binance from WazirX last week in a tweet, explaining, "Binance does not hold any ownership in Zanmai Labs, the company running WazirX and created by the original founders. Zanmai Labs, the company that runs WazirX, has never been owned by Binance and it solely offers WazirX wallet services as a technical aid.
The Enforcement Directorate (ED) is now keeping an eye on WazirX for allegedly helping fast lending app firms launder money. In reality, the agency has blocked the Indian cryptocurrency exchange's financial assets as a result of a search operation conducted on August 3, 2022, in accordance with the Prevention of Money Laundering Act (PMLA).
“It was found that Sameer Mhatre, Director WazirX, has complete remote access to the database of WazirX, but despite that he is not providing the details of the transactions relating to the crypto assets, purchased from the proceeds of crime of instant loan app fraud. The lax KYC norms, loose regulatory control of transactions between WazirX and Binance, non-recording of transactions on block chains to save costs and non-recording of the KYC of the opposite wallets has ensured that WazirX is not able to give any account for the missing crypto assets," the ED alleged in a statement.
Given India's enormous potential and the more than 100 million crypto investors the nation currently has, it only seems sense that Binance would not want to jeopardize its image or run afoul of the country's law enforcement authorities. This takes greater importance in light of the accusations made against WazirX and the fact that the ED has a solid track record of pursuing inquiries.
