Thursday, September 29, 2022

WazirX Users in Panic Mode After Being Asked to Move Funds to Binance

Chief Executive Officer (CEO) of Binance Changpeng “CZ” Zhao has ignited fear in the hearts of many WazirX users. The Binance boss had made an incriminating statement saying that it could shut down the crypto firm WazirX. The users of WazirX were advised to transfer their funds to Binance instead.

The Asian cryptocurrency exchange WazirX has been under the radar of several Indian authorities. It allegedly violated the Indian Foreign Exchange Management Act (FEMA). Later, it was listed by the State Minister for Finance for the Indian government, Pankaj Chaudhary as one of the crypto firms which had successfully evaded tax

Presently, it is under the eagle’s eye of the Indian Directorate of Enforcement (ED). Recently, it was accused of assisting loan app companies that were suspected of illegal activities. The loan app companies have been involved in laundering customers’ funds. With the help of WazirX, they were able to redirect the stolen funds to crypto wallets.

On its part, WazirX failed to conduct a know-your-customer (KYC) procedure and enhanced due diligence (EDD) on the companies.

To that effect also, no suspicious transaction report (STR) was submitted to inform the Financial Intelligence Unit (FIU). As a matter of fact, the transactions between the Asian exchange and the loan companies could not be traced on the blockchain.

Binance Denies Ownership of WazirX

Consequently, WazirX had its bank assets up to Rs. 64.67 crores approximately $8.13 million at current market value seized by ED. Nischal Shetty one of WazirX’s owners previously mentioned that WazirX is linked to Binance Holding Limited. Currently, CZ has denied completely owning the Asian exchange. 

According to CZ, all Binance does for WazirX is provide its users with wallet services. He took to Twitter to give a response, “Binance provides wallet services for WazirX. WazirX domain is transferred to our control. We were given shared access to an AWS account. We could shut down WazirX. But we can’t because it hurts users,” CZ tweeted clarifying the details of the previous purchase of WazirX by the bigger exchange.

Trying to allay users’ fears, WaxirX assured them that for now all its transactions are being conducted normally. Vice President of the Asian exchange, Rajagopal Menon stated that WazirX is one of the largest crypto firms in India that allows complete withdrawal of funds. Therefore, making it hard for them to be insolvent.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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