Binance accuses WazirX CEO Nischal Shetty of misleading customers after wallet attack

Binance has released a statement distancing itself from the Indian crypto exchange WazirX, even as the latter claimed it had been acquired by Binance

Binance distanced itself from WazirX even as the Indian exchange claimed its dispute with Binance is ongoing [File] | Photo Credit: REUTERS

The international cryptocurrency exchange Binance has released a statement distancing itself from the Indian exchange WazirX and accusing CEO Nischal Shetty of misleading customers, after the Indian company’s multi-signature wallet was hacked, leading to the loss of more than $230 million and bringing to light a contentious business relationship between the two exchanges.

While WazirX has claimed that it was acquired by Binance and supplied a blog post from Binance confirming this in 2021, Binance maintains that it has “not owned, controlled, or operated WazirX at any time, including before, during, or after the July 2024 attack.”

Binance further criticised WazirX’s handling of the cyber-attack that led to the loss of user funds. Previously, Shetty had claimed that he could not compensate WazirX users with the company’s profits, because he did not own the company.

This triggered widespread confusion and outrage regarding the ownership of WazirX and whether the company was even in a position to be controlling its users’ assets.

Binance said that it could not be held accountable in this matter.

“The security and protection of user funds is a fundamental responsibility of any cryptocurrency platform. We urge the WazirX team under Zanmai/Zettai to be accountable to WazirX users and compensate them for the funds that have been lost under Zanmai/Zettai management. Their responsibility to WazirX users is unrelated to their dispute with Binance,” said Binance in a statement posted on Tuesday (September 17, 2024), as it flagged what it called the Indian exchange’s “disappointing deflection tactic.”

After the loss of more than $230 million in assets, WazirX halted trading activities and stopped crypto withdrawals, while INR withdrawals were only partially opened due to illiquid assets. WazirX went on to announce that it would undergo restructuring through the Singapore legal system and applied for a moratorium to protect it from legal action in the meantime. This process could take months, per the company, leaving crypto investors stranded.

The cause of the cyber-attack is not yet official, as both WazirX and third-party crypto custody solutions provider Liminal only blamed each other for lapses.

“Binance was not involved in the operation of WazirX or the compromised wallet at the time of the attack,” said Binance in its blog post.

WazirX users have taken to social media platforms like X to express their difficulties as they cannot access their crypto. Users have claimed they are unable to get medical treatment and are suffering without funds, while others worry crypto prices might crash before they can withdraw their assets.

Published - September 18, 2024 12:23 pm IST