2024

WazirX

<p>Binance has denied recent claims that it has owned, controlled, or operated WazirX, whether before, during, or after the July 2024 WazirX attack. Since the attack over millions of users are stranded as their crypto funds have been locked by wazirX.</p>
<p>In its moratorium application to Singapore High Court, Wazirx vis-a-vis Zettai Pte Ltd, had claimed that Binance owns the obligation to make users full for their crypto losses in the hack and not by Zettai. In a <a href="https://www.binance.com/en/blog/community/to-the-wazirx-community-correction-of-zettais-inaccurate-and-misleading-statements-concerning-binance-4005526688459858370?hl=en" target="_blank" rel="noopener noreferrer nofollow">press release</a>, Binance trashed WazirX’s claims and rejected its liability towards users post the 2000 crore hack. Binance asserts that this obligation was made by the WazirX team under Zanmai/Zettai and hence they are the concerned party here.</p>
<p>Binance notes that the Indian firm, Zanmai, is the entity that registered the WazirX platform with the Indian FIU in 2023, and India’s Enforcement Directorate <a href="https://sansad.in/getFile/loksabhaquestions/annex/1714/AU112.pdf?source=pqals" target="_blank" rel="noopener noreferrer nofollow">recognizes</a> it as the proprietor of WazirX.</p>
<p>Zettai claimed that Binance was involved in WazirX’s operations and contributed to mishandling user funds during a hack. Binance denied these claims, stating that it never acquired WazirX, was not involved in the hack, and had requested the removal of WazirX user funds from its wallets months before the incident.</p>
<h2 class="wp-block-heading" id="the-2000-crore-hack">The 2000 Crore Hack&nbsp;</h2>
<p>The July 18, 2024, WazirX hack resulted in <a href="https://www.cryptotimes.io/2024/07/18/wazirx-hack-investor-funds-in-limbo-as-230-million-vanishes/" target="_blank" rel="noopener noreferrer nofollow">the loss of approximately $235 million</a> in user funds. The hack targeted a multisig wallet with five signatories from WazirX and one from Liminal, the third-party custodian. In the aftermath, Zettai applied for a moratorium in Singapore to prevent legal action from creditors. Nischal Shetty, the co-founder of WazirX, submitted affidavits blaming Binance for the issues following the hack.</p>
<h2 class="wp-block-heading" id="binance-s-response-to-wazirx-claims">Binance’s Response to WazirX Claims</h2>
<p>In the recent <a href="https://www.binance.com/en/blog/community/to-the-wazirx-community-correction-of-zettais-inaccurate-and-misleading-statements-concerning-binance-4005526688459858370?hl=en" target="_blank" rel="noopener noreferrer nofollow">press release</a>, Binance issued a lengthy refutation to Zettai’s assertions, covering numerous significant points:</p>
<h3 class="wp-block-heading" id="1-ownership-and-control">1. Ownership and Control:&nbsp;</h3>
<p>The very first point Binance asserted that it never acquired or controlled WazirX. The proposed acquisition did not proceed because Zettai failed to fulfill its obligations. Binance claim that Zanmai Labs Pvt Ltd, the Indian entity, continues to own and operate WazirX. India’s Directorate of Enforcement has confirmed that Zanmai remains the owner, and Mr. Shetty publicly stated he is still running WazirX.</p>
<h3 class="wp-block-heading" id="2-liability-for-user-funds">2. Liability for User Funds:</h3>
<p>The ongoing dispute between Zettai and Binance does not mean Binance is accountable for WazirX users. Binance doesn’t own or control WazirX, so it is not responsible for any claims or compensation related to WazirX. There is no legal reason for Binance to pay Zettai’s creditors.</p>
<p>Binance is clearly distancing itself from Wazirx users’ funds and is taking zero responsibility to intervene in the situation.</p>
<h3 class="wp-block-heading" id="3-wazirx-user-agreement">3. WazirX User Agreement:</h3>
<p>Mr. Shetty’s allegation that Binance provides cryptocurrency-related services to WazirX members as per the WazirX User Agreement. But Binance denied these accusations, and it has never provided such services. It just supplied wallet services to Zanmai, as is customary with other virtual asset service providers worldwide.</p>
<p>The references to Binance in the WazirX User Agreement are unlawful and misleading, as Binance has never consented to or sponsored these conditions. Despite our objections and demands for their removal, Mr. Shetty and Zanmai have ignored these requests. Binance does not control WazirX and cannot amend its User Agreement, and the ongoing dispute with Zettai does not involve Binance becoming a party to this agreement.</p>
<h3 class="wp-block-heading" id="4-custody-of-user-funds">4. Custody of User Funds:</h3>
<p>Binance provided wallet services to Zanmai as a technology solution akin to its services for other VASPs. After Binance’s notice in January 2023, Zanmai appointed Liminal as the custodian for WazirX user funds. Binance was not involved in this decision or the custody of the funds.</p>
<h3 class="wp-block-heading" id="5-responsibility-for-cyberattack-consequences">5. Responsibility for Cyberattack Consequences:</h3>
<p>Mr. Shetty’s claim that Binance is to blame for the cyberattack is inaccurate. Before the incident, Binance requested that WazirX customer funds be removed from its wallets. Once the money was taken, they were transferred to Liminal, a custody company chosen by Mr. Shetty and Zettai with whom Binance had no involvement. WazirX and Liminal, not Binance, handled the compromised wallets. Binance has requested reports on the incident but has not received any. Grant Thornton’s investigation concluded that the attack did not originate in Liminal’s infrastructure.</p>
<h3 class="wp-block-heading" id="6-statements-by-mr-shetty">6. Statements by Mr. Shetty:</h3>
<p>Mr. Shetty and Zettai are spreading misleading information about Binance’s role with WazirX. Binance has never owned, controlled, or operated WazirX, including during the July 2024 hack. Binance is not responsible for WazirX’s operations or the attack’s consequences. We encourage users to critically assess these misleading statements. Binance remains committed to transparency and user protection.</p>
<p>In conclusion, Binance firmly rejected Zettai’s accusations and called for the WazirX team to be accountable for the hack and compensate affected users, distancing itself from any liability regarding the incident.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p>Also Read: <a href="https://www.cryptotimes.io/2024/09/06/exclusive-are-these-north-korean-hackers-behind-wazirx-hack/" target="_blank" rel="noopener noreferrer nofollow">Exclusive: Are these North Korean Hackers behind WazirX Hack?</a></p>
</blockquote>

Binance Trashes WazirX Claims and Rejects Liability for Hack

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