Exchange Binance fought with WazirX, leaving 15 million crypto investors in limbo.
After the ED raided WazirX’s headquarters on Friday, as the conflict between WazirX’s co-founders went up on Twitter, the value of the WRX token, native to the WazirX exchange, dropped.
Rift Between Binance and Wazirx over ownership
As Changpeng Zhao, founder and CEO of Binance, and Nischal Shetty, cofounder of the defunct cryptocurrency exchange WazirX, quarreled over Twitter during the weekend bout over the former’s purchase of the latter, WazirX users were the sole focus of this fight. As of August, WazirX had 15 million registered users.
The United Nations Foundation suspended transactions through WazirX, a popular feature on the exchange, leading to the WRX native exchange losing as much as 14 percent. Off-chain transfers are transactions that occur on an off-chain system and transfer the value from that system to an on-chain system. Due to their zero or low cost, these transactions are becoming popular, especially among large participants.
Enforcement Directorate (ED) keeping eye on Wazirx and Binance transactions.
These deals were well-liked by the investors on the exchange and frequently do not incur a transaction fee. It’s interesting to see that the Enforcement Directorate (ED) has been monitoring these.
The ED said in a statement on Friday that “after being given numerous chances, WazirX failed to provide the cryptocurrency transactions of the questionable fintech APP companies and divulge the KYC of the wallets. The majority of transactions are also not stored on the blockchain.
After conducting searches on the exchange in connection with a case of cryptocurrency money laundering, the ED revealed on Friday that bank assets worth Rs 64.67 crore owned by the WazirX Director had been frozen.
WRX was trading at $0.2816 at roughly 4:00 PM IST on Friday and dropped to $0.2407 at 11:00 AM IST on Monday, according to CoinMarketCap. During that time, the cryptocurrency dropped 14.52 percent.
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Amish Prajapati, a Mumbai-based WazirX user, revealed to Business Today that he had made sizeable investments in the WRX tokens but is now resting on hefty losses.
The value of WRX has decreased since the start of the year, according to Prajapati. The news of the 30% tax came first, followed by the Luna crash, and now this. I’m at a complete loss.
CZ’s tweet on WazirX Ownership
Additionally, after Zhao tweeted, “We could shut down WazirX,” investors began to panic. He then encouraged WazirX users to transfer money to Binance in another tweet. “Transfer your WazirX funds to Binance if you have any. That’s all,” Zhao cautioned.
The WazirX telegram group started receiving a deluge of questions from users and investors as confusion mounted. Similar things happened to other Indian crypto telegram groups as well.
Should I sell all of my WRX holdings or keep them, a Telegram member questioned.
But this is not the first time the WRX token has made headlines, and not always for the right reasons.
WazirX ran into difficulty with the GST department in January of this year because the regulatory body claimed the exchange had failed to pay the appropriate 18% GST on transactions made on the exchange using these tokens. Later, WazirX had to pay the tax authority Rs 49.2 crore.
WazirX asserts that all investor monies are secure and that business as normal is being conducted in spite of the investors’ concerns.
The exchange issued a statement in response to the recent incident, saying: “We would like to note that at this time, deposits and withdrawals are functioning as usual. We are assessing our next course of action and will always act in the users’ best interests.