As reported by local news outlet The Economic Times on Monday, Binance is scheduled to remove off-chain fund transfers with Indian cryptocurrency exchange WazirX on Thursday, although users will still be able to deposit and withdraw balances via the standard withdrawal and deposit process between the two exchanges.
Three days prior, The Directorate of Enforcement of India alleged that WazirX "actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route" and subsequently froze $8.1 million in bank balances related to the exchange.
Simultaneously, there is an ongoing controversy regarding whether Binance owns the exchange. Last Friday, Changpeng Zhao (CZ), CEO of Binance, said that Binance does not own any equity in WazirX's parent entity Zanmai Labs, and further clarified that a supposed Nov. 21, 2019, acquisition of WazirX by Binance was never completed.
However, in a tweet dated April 5, 2021, Zhao reposted the following statement from The Financial Express:
"Binance-owned Indian crypto exchange WazirX crosses $200 million in daily trading volume; eyes $1 billion in 2021."
In a similar post, Nischal Shetty, founder of WazirX, claimed that WazirX was acquired by Binance, with the latter involved in operations such as crypto-to-crypto trading pairs, processing crypto withdrawals, and the like. Furthermore, Shetty alleged that Binance owned the WazirX domain name, had root access to its servers, and controlled all of WazirX's crypto assets and trading profits.
Binance's CEO CZ has adamantly denied such claims, stating:
"Binance only provides wallet services for WazirX as a tech solution. There is also integration using off-chain tx to save on network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals.
WazirX has been embroiled in a number of controversies as of late. Last year, India's Enforcement Directorate was already investigating the exchange due to allegations of Anti-Money Laundering failings. Earlier this year, government officials from the Central GST and Central Excise committee recovered $6.62 million worth of funds from the exchange after detecting GST evasion on trade commissions.