WazirX Reveals Binance’s Involvement in Managing WRX Tokens, Escalating Conflict
WazirX, one of India’s leading cryptocurrency exchanges, has reignited the “war” with Binance, the world’s top crypto exchange, by revealing that Binance is managing the burning and allocation of WRX tokens. This development marks the latest episode in the ongoing conflict between the two platforms, which began in August 2022.
The series of events leading up to the present situation started with the Indian financial crime enforcement agency, the Enforcement Directorate (ED), sealing WazirX’s assets on August 5, 2022, on allegations of aiding money laundering for 16 fintech companies. Additionally, $8 million was frozen in connection with the case.
On the same day, Binance CEO Changpeng Zhao (CZ) sparked controversy by stating that “Binance has never acquired WazirX,” despite a blog post on Binance’s website announcing the acquisition in late 2019.
On August 6, 2022, Nischal Shetty, the founder of WazirX, refuted CZ’s claims. Later in November 2022, the head of Binance clarified on his Twitter account that “Binance does not own any shares in Zanmai Labs, the entity operating WazirX.”
However, on January 30, 2023, Zanmai Labs affirmed that Binance is indeed the controlling entity of WazirX since their acquisition agreement in 2019. They further stated that 90% of users’ assets, worth nearly $260 million, reside in Binance wallets, with Binance earning a significant portion of trading fees as profit.
Subsequently, on February 3, 2023, Binance officially announced the termination of wallet services for WazirX and requested Indian partners to withdraw their funds from the Binance platform.
Since then, Binance has consistently distanced itself from WazirX, even amending and adding disclaimers to their previous blog post about the acquisition, specifying that Binance only acquired “certain intellectual property assets” of WazirX.
WazirX’s New Statement Regarding WRX Token Management
In the latest development, WazirX provided evidence of Binance’s involvement with the WRX token through an official announcement on their Twitter account.
According to WazirX, Binance has controlled the locked WRX token wallets since WazirX’s IEO Launchpad in early 2020, with a value of 108,401 BNB (equivalent to $2 million). They also claimed that Binance manages the allocated wallets for distributing WRX tokens according to the scheduled release.
📢 Update on $WRX Token Management & Burn Clarification
Full details here – https://t.co/pzhjsJCXpl
In light of recent events, we would like to clarify that Binance controls the WRX token.
Binance had conducted the IEO for $WRX, and all the sale proceeds of WRX IEO (i.e.,… pic.twitter.com/ChZqlGuhBt
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) May 16, 2023
WazirX presented a series of wallet addresses that demonstrate Binance’s current holding of a total of 580.78 million locked and unlocked WRX tokens.
To support their claim, WazirX provided details of transactions where Binance transferred 116.8 million WRX tokens (11.68% of total supply) to their treasury account on binance.com. These transactions occurred on different dates and involved unlocked tokens.
WazirX confirmed that they have not received any token allocation, and Binance is responsible for burning WRX tokens quarterly. Notably, Binance has not conducted any token burns for five quarters since January 2022.
The last token burn by Binance took place in Q4/2021, from October to December, during which 9,633,333 WRX tokens were burned, equivalent to $6 million.
WazirX continues to provide detailed information about the pending token burn phases from January 2022 to March 2023.
The revelation of Binance’s involvement in managing WRX tokens adds fuel to the ongoing dispute between WazirX and Binance, raising concerns and intensifying the conflict between the two exchanges. This disclosure by WazirX highlights the extent of Binance’s control over the WRX token, contradicting previous claims made by Binance regarding their relationship with WazirX.
The allocation and burning of WRX tokens play a significant role in the token’s value and supply dynamics. By asserting that Binance manages these aspects, WazirX is challenging Binance’s attempt to distance itself from their operations. This revelation raises questions about the level of autonomy WazirX has as a separate entity and whether Binance’s influence extends beyond what has been previously acknowledged.
Moreover, WazirX’s statement emphasizes that Binance has not conducted any token burns since early 2022, which may raise concerns among WRX token holders. Token burns are a common practice in the cryptocurrency space to reduce the token supply, potentially increasing its scarcity and value. The absence of recent burns may have implications for WRX’s long-term value proposition.
As the dispute between WazirX and Binance continues to escalate, it remains to be seen how this revelation will impact the relationship between the two exchanges and their users. The disclosure of Binance’s control over the WRX token raises questions about transparency, governance, and the independence of WazirX as a separate platform.
Both WazirX and Binance will likely face increased scrutiny from regulators, investors, and the crypto community at large. The implications of this ongoing conflict could extend beyond the two exchanges and have broader implications for the cryptocurrency industry in India and beyond.
The market reaction to this news will be closely watched, as investors and traders assess the potential impact on the value of the WRX token and the trustworthiness of both WazirX and Binance as reliable cryptocurrency platforms. It remains to be seen how this dispute will ultimately be resolved and what consequences it will have for the future of both exchanges.
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