As a seasoned analyst with years of experience navigating the complex world of digital assets and cryptocurrencies, I find myself deeply concerned about the ongoing saga at WazirX. The recent revelations by co-founder Nischal Shetty during the Townhall event have raised more questions than answers, particularly regarding the ownership and management of users’ crypto funds.
During a recent Townhall gathering, Wazirx co-founder Nischal Shetty admitted that the exchange’s management remains unaware of the identity of the person(s) responsible for safeguarding users’ cryptocurrency funds. This confession was made approximately 45 days after an estimated Rs 2000 crores in digital assets were stolen during a cyber attack.
Based on Shetty’s analysis, I find myself in a position where I can’t confidently identify the contractual partner for users holding cryptocurrency funds on WazirX due to the ongoing legal dispute between WazirX and Zettai, leaving the situation uncertain.
During a non-interactive Townhall meeting on YouTube, Shetty spoke to WazirX users about an ongoing disagreement between WazirX and Binance. This disagreement pertains to who owns the exchange and manages its cryptocurrency assets.
It is pertinent to note that WazirX has frozen 100% crypto funds of all users and for now, only allowed 66% withdrawal of INR funds in two separate phases.
Nischal stated that the Indian Rupee (INR) funds of the exchange are managed by Zanmai Private Labs, a company based in Mumbai, India. For the time being, the crypto funds have been overseen by Zettai, a firm registered in Singapore. Shetty further disclosed that Zettai took charge of the crypto operations not as part of their regular duties, but in response to Binance’s departure in January 2023.
During a town hall meeting lasting approximately one hour and thirty minutes, Shetty disclosed that he had transferred ownership of WazirX exchange to Binance back in 2019. However, in 2022, a disagreement arose between the two companies when Binance decided not to support WazirX.
As per Shetty’s explanation, since it’s unclear who actually owns the platform, it’s equally uncertain as to who the contractual partner is for users holding cryptocurrency balances on the WazirX platform.
Lately, Shetty announced on ‘X’ that he no longer owns the cryptocurrency exchange WazirX and declined to provide additional information. The latest disclosure by Shetty raises an important question: Since Binance is set to halt its partnership with WazirX from July 2023, why hasn’t the exchange administration informed its users that they are currently in a state of uncertainty regarding the ownership of their cryptocurrency holdings?
WazirX Users Livid over Lack of Transparency in Townhall Event
Many WazirX users have voiced their disapproval towards Shetty and the exchange’s leadership, as they organized a “one-way” YouTube event that did not provide a platform for users to ask questions directly to Shetty.
On Monday, WazirX arranged a Town Hall meeting, expressing their intent to share their proposed restructuring plan and moratorium application with users prior to presenting it at the Singapore High Court on Tuesday for the approval of the moratorium.
They inhabit our nation, yet they seize our earned wealth, now they even have the nerve to ridicule our legal system by suggesting it’s inadequate for managing this predicament. How presumptuous of them!#WazirX partners show an unmitigated gall in asserting that we’re fortunate it’s going to Singapore and downplaying…
— Justice for WazirX Users (@IndiasCrypto) September 2, 2024
Many WazirX users asserted that the YouTube Live event was a pre-recorded broadcast, providing no opportunity for questions. On the other hand, WazirX stated they had garnered backing from over 10,000 of their 1.6 crore registered users in support of their application for a moratorium in the Singapore High Court. This equates to an approval rating of only 0.0006% for the moratorium application.
Conclusion
In the ongoing dispute between Wazir and Binance over ownership issues, it’s important to understand that Shetty holds a significant share in Zettai, the company currently managing the crypto assets and operations for the exchange. Previously, the Indian Enforcement Directorate claimed that Nischal attempted to hide WazirX’s ownership through two companies, Zanmai and Zettai, in an effort to obscure its true control.
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2024-09-02 13:24