Binance denies WazirX ownership and responsibility for a recent $235 million hack, urging the platform to address user fund losses.
Binance released a statement addressing recent claims about its relationship with the Indian crypto platform WazirX in a blog post earlier today. This announcement follows a reported hack on WazirX in July 2024, which resulted in the loss of user funds valued at approximately $235 million.
The statement responds to assertions made by Nischal Shetty, the primary owner of Zettai Pte Ltd, a Singapore-incorporated entity associated with WazirX. Shetty submitted sworn affidavits to the Singapore High Court as part of an application for a moratorium to prevent creditors from taking collective action against the company.
In these affidavits, Shetty made claims regarding Binance's relationship with WazirX, which Binance disputes. In fact, the exchange has been denying ever completing its acquisition of the smaller Indian crypto exchange since 2022.
"Their attempts to shift responsibility is a disappointing deflection tactic, but it should not distract anyone from the glaring issue to be addressed here: the need for the WazirX team to be held accountable for user funds lost under their management," Binance wrote in its blog post.
WazirX did not immediately respond to a request for comment from Decrypt.
WazirX Seeks 30-Day Moratorium to Restructure as Rival Sues for Locked Funds
Crypto exchange CoinSwitch has taken legal action against its beleaguered competitor WazirX over funds stuck on the latter’s platform following an alleged cyber attack in July. The lawsuit is being filed the same day that WazirX announced in a blog post that yesterday it filed for a 30-day moratorium with Singapore’s High Court. A hearing date has not yet been scheduled, the exchange wrote. If the moratorium is approved, it’ll give the exchange “breathing space while Zettai progresses with a r...
Binance's statement addresses several key points. The exchange says that although it did sign a contract, it never completed the acquisition of WazirX due to Zettai's failure to fulfill its obligations.
Binance maintains that it has never owned, controlled, or operated WazirX. The exchange—the largest in the world by volume—also says it is not a party to WazirX's User Agreement with its customers and that references to Binance in the agreement are unauthorized.
Regarding the hack, Binance maintains it bears no responsibility. The exchange writes that in January 2023, it instructed Zanmai, an Indian company associated with WazirX, to withdraw funds from Binance-hosted cryptocurrency wallets.
WazirX Sets Aside $12 Million to Recover Stolen Crypto, Pay Legal Costs
WazirX has set aside millions of dollars to cover legal costs related to the theft of hundreds of millions of dollars in crypto after a cyberattack in July brought the Indian exchange to its knees. On Wednesday, Singapore-based Zettai Pte Ltd, the holding company of WazirX, filed an affidavit with the High Court of Singapore, requesting a 30-day moratorium to facilitate discussions with investors and creditors to stabilize the platform. The moratorium, if granted, is seen as essential for ensur...
This withdrawal was completed before the attack occurred, the exchange says. Binance also notes that the choice of the new custody solution provider Liminal was made by Shetty and Zettai without Binance's involvement.
The compromised wallet was reportedly operated using Liminal's services, but this company also denied any responsibility for the hack.
Binance states that it has requested, but not received, reports on the incident, including a purported report from cybersecurity firm Mandiant dated August 14, 2024. The exchange calls on the WazirX team to address their users' concerns regarding the lost funds, stating that this responsibility is separate from any dispute with Binance.
Edited by Stacy Elliott.
