Binance may be the cause of the collapse of WazirX

The story involving two cryptocurrency exchanges continues. Binance, known as the largest crypto platform in the world, announced in 2019 the purchase of the Indian exchange WazirX. In 2019, the right to own it was not disputed in any way. Binance even published on their blog information about the purchase of WazirX, and the latter, in turn, confirmed the information.

Nothing foreshadowed trouble, but last summer WazirX had problems and disagreements with the Indian government. The Indian authorities have decided to raid WazirX's office in Mumbai due to suspicions of money laundering for 16 fintech companies.

After this turn of events, Binance began to move away from the Indian exchange in the media space. Users immediately saw the difference in a blog post in which the Hong Kong-based platform talked about acquiring WazirX. Instead of a full-fledged purchase of the exchange, it indicated “an agreement to purchase certain assets and intellectual property.” Thus, the beginning of disputes between the leaders of cryptocurrency platforms in the questions “Who owns the rights to own the Indian exchange?” was laid. Events have reached new heights this week.

On January 26, India's National Day, Binance made a nasty gift to WazirX and sent them a letter of demand. They asked their partners to take two actions without which Binance could withdraw from the agreement with WazirX on February 3rd. The Indian company now has practically a few days to fulfill the necessary requirements.

The first of these is to prepare an explanatory statement refuting the words of one of the founders of WazirX, Nishal Shetty, about their belonging to Binance. The second condition is that the Indian company must remove all mention of their partner in their terms of service.

Binance threatens WizarX with termination of the contract in case of refusal to fulfill the requirements. Insiders familiar with the Indian stock exchange claim that such an outcome will lead to their collapse. 90% of all funds of WazirX clients are not stored on Indian company wallets, but on Binance accounts.

Changpeng Zhao added on his own behalf that all users who have their savings on WazirX must move the funds to Binance. On the one hand, this sounds like a threat and a hint that users may lose their funds, and on the other hand, Zhao explained that although it is technically possible to turn off the wallets of the Indian exchange, no one will resort to this action, since this will be harmful to clients. Nevertheless, precautions should not be neglected, since it is not known what step the owners of WazirX will take after the aggravation of circumstances, especially considering that they were accused of money laundering.