In an explosive revelation made during a Townhall event, Wazirx co-founder Nischal Shetty said that the crypto exchange management does not know who is responsible for the user “crypto funds”, almost 45 days after Rs 2000 crores in crypto were stolen in a cyber hack.
As per Shetty, due to an ongoing legal dispute between WazirX and Zettai, “no one knows” who is the contractual counterparty to users owing crypto funds on WazirX.
Shetty was addressing users of WazirX through a Youtube live stream in a “non-interactive” Townhall event wherein he revealed that there is an ongoing dispute between WazirX and Binance over the ownership of the exchange including management of its crypto 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.
According to Nischal, the INR funds of the exchange is handled by Zanmai Private Labs incorporated in Mumbai of India and the crypto funds have been handled “temporarily” by Zettai, a company registered in Singapore. However, Shetty also revealed that Zettai has been handling the crypto operations “in protest” after Binance had quit in January 2023.
In a one and a half hours long Townhall session, Shetty revealed that he had sold WazirX exchange to Binance in 2019 and in 2022, there was a dispute between the two companies after Binance refused to serve WazirX.
According to Shetty, “because it is not clear who owns the platform, it is also not clear who the contractual counterparty is for users with crypto balances on the WazirX platform (sic).”
Recently, Shetty had posted on ‘X’ that he was no longer the owner of crypto exchange WazirX and refused to divulge further details. The recent revelations by Shetty has led us to a pertinent question that since Binance stopped its operations with WazirX from July 2023, so why didn’t the exchange management inform its users, that currently there are in a limbo situation regarding the responsibility of their crypto holdings?
WazirX Users Livid over Lack of Transparency in Townhall Event
Several users of WazirX criticized the decision of Shetty and exchange management to hold a “non-interactive” event on Youtube where they were not given an opportunity to press questions to Shetty.
WazirX had organised this Town hall event on Monday claiming that they wish to discuss the re-structuring plan and moratorium application with the users before they approach the Singapore High Court on Tuesday for the moratorium.
Many WazirX users also alleged that the Youtube Live session was a “pre-recorded” one and offered no chance for them to pose questions. WazirX has also claimed that they had received support of over 10,000 users for their moratorium application in Singapore High Court out of their total 1.6 crore registered users. That makes approval rating of 0.0006% for the moratorium application.
Conclusion
While Wazir continues its blame game with Binance over the ownership dispute, it is pertinent to note that Shetty has the majority stakes in Zettai which currently handles crypto holdings and operations of the exchange. Earlier, the financial crimes investigative agency ‘Enforcement Directorate’ of India had alleged that Nischal had tried to obfuscate the ownership of WazirX through two layers of companies- Zanmai and Zettai.
Read More: WazirX Keeps 100 Crores from User Funds for “Legal Costs”; Is Facing Four Legal Notices
