Wazirx Ownership Story Gets Murkier

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  • Emails between Binance and Wazrix show fundamental disagreements over the company’s ownership
  • Binance was thought to have bought the exchange in late 2019, but the situation has become complicated
  • Wazrix accuses Binance of making “unethical” demands using its muscle to get its way

A debate about who owns the Indian crypto exchange Wazirx has gotten murkier after emails obtained by Coindesk showed disagreements between the company and Binance over the state of ownership. The email chain shows arguments over actions by both parties, and it seems a peaceful resolution is still some way off.

Wazrix Raid Sparked Disagreement

In November 2019, Binance, the world’s largest crypto exchange, announced it had acquired Indian exchange Wazirx, and for ten months there was no debate about who owned the company. However, in August 2020, Wazirx was raided by Indian officials for alleged money laundering, leading to Binance distancing itself from Wazirx by amending the announcement to state that it only bought certain assets and intellectual property, not the whole company.

Binance also claimed the transaction never went through, a version of events that was disputed by Wazirx, which said it had proof, but never shared it (Craig Wright, anyone?). This week however, CoinDesk obtained proof of Wazirx’s ownership after a private resolution of the disagreement.

Binance Demanded that Wazirx Revoke Ownership Claims

The emails show that on January 26, Binance sent Wazirx a letter demanding that the Indian exchange retract previous statements about Binance owning Wazirx and remove all references to Binance in its terms of service. If these conditions weren’t met by the end of the month, Binance said, it would terminate its service agreement within a week. Wazirx responded by calling the demands “unethical”, and accusing Binance of using “media pressure and threats” to force false and misleading statements.

In a letter to Binance, Wazirx co-founder Nischal Shetty refused to retract previous statements that Binance had purchased the Indian exchange, stating that Wazirx had transferred control and ownership of the platform to Binance. He also accused Binance of profiting from its control, as well as withdrawing over $67 million earned as trading fees on the Wazirx platform.

Shetty attached a partially redacted email chain between Binance US CEO and Wazirx VP of finance, discussing an amended “share purchase agreement” granting Binance ownership of certain Wazirx accounts.

Partnership Will End if Wazrix Doesn’t Comply

As per the email series, Wazirx was granted permission to operate Binance accounts for its benefit and Binance was acknowledged as the accounts’ owner. On July 28, 2021, Schoder confirmed the transfer process with Patel after the purchase agreement was accepted, with no further updates received on the matter.

If Wazirx fails to comply with Binance’s requests, their partnership will end, as stated in Binance’s demand letter. Both exchange sources predict that this would severely impact Wazirx, as per the Jan 11 proof-of-reserves report, 90% of Wazirx user assets are held in Binance-controlled wallets.

In August this year, Binance owner Changpeng Zhao made his feelings very clear on the matter in a tweet:

Time will tell if, and how, this messy issue will be resolved.