- Binance reiterates its stance of non-involvement with WazirX, refuting claims of ownership or control.
- WazirX faced a major exploit, resulting in over $230 million worth of crypto assets being siphoned off.
- Zettai, the holding company behind WazirX, is seeking a moratorium from the Singapore High Court to restructure its liabilities post-exploit.
Binance firmly states it has no link with WazirX operations amid major crypto exploit controversy.
Binance Clarifies Its Position Regarding WazirX
On Tuesday, Binance emphasized that it does not own, control, or operate WazirX, countering statements allegedly made by a director of WazirX’s parent company, Zettai. This follows an incident on July 18 when WazirX suffered a significant exploit, leading to an unauthorized transfer of assets worth $230 million from its multisig wallet on the Ethereum network. This exploit, attributed to a possible private key compromise, has led to significant financial turmoil for the exchange.
WazirX’s Legal Actions and Restructuring Efforts
In response to the exploit, Zettai, the Singapore-based holding company of WazirX, applied for a moratorium with the Singapore High Court in August to restructure its obligations. Zettai suggested that the moratorium would provide a four to six-month window to create a viable restructuring plan, facilitating the reopening of cryptocurrency withdrawals. The High Court granted an automatic 30-day moratorium, with a decisive hearing scheduled for September 25 to determine the extension of the moratorium. Zettai also acknowledged its ongoing dispute with Binance but mentioned that details are under confidentiality obligations.
Ongoing Dispute Between Binance and WazirX
In a recent blog post, Binance accused WazirX’s leadership, including director Nischal Shetty, of misleading customers about the relationship between the two exchanges. Binance asserted that the Enforcement Directorate of India recognizes Zanmai, not Binance, as the owner of WazirX. Initially, Zanmai managed WazirX’s Indian operations but is now wholly owned by Zettai.
Allegations and Counterclaims Amidst the Cyber Attack
Binance detailed that Shetty submitted affidavits containing allegedly inaccurate statements about the relationship and responsibilities concerning the cyberattack. Binance stressed that it has never had operational control over WazirX and is not liable for the losses incurred due to the hack. The exchange clarified that although there was an agreement between the parties, the transaction was never finalized because Zettai did not fulfill its obligations. It also emphasized that the compromised wallet had signatories from WazirX and a third-party custody solutions provider, Liminal, with no involvement from Binance.
Investigation Findings and Responsibilities
According to an investigation by Grant Thornton, the exploit likely originated outside of Liminal’s infrastructure. Binance further claimed that Shetty indicated that a resolution of their dispute might mistakenly conclude that Binance owns WazirX, implicating Binance in covering Zettai’s liabilities, which Binance firmly denied. Binance clarified it does not manage WazirX’s cryptocurrency services, stating it only provided tech solutions for wallets, which it does for many other parties.
Conclusion
Binance concluded by urging the WazirX team under Zanmai/Zettai to be accountable to their users and compensate them for the losses resulting from the exploit. The exchange reiterated its call for transparency and responsibility, distancing itself from the operational mishaps and financial repercussions faced by WazirX users. This ongoing dispute highlights the need for robust security and clear operational delineation within the cryptocurrency exchanges.
