The Binance-WazirX feud escalated on Monday, with the former removing the off-chain fund transfer channel between the two.
Patrick Hillmann, chief communications officer, Binance, said in an official communiqué, that “Binance will cease to support off-chain fund transfers between WazirX Exchange and Binance via the ‘Login with Binance’ option. Users will still be able to deposit and withdraw balances via the standard withdrawal and deposit process between Binance and WazirX.”
Off-chain transactions are those occurring on a crypto network which move the value outside of the blockchain. Due to their zero or low cost, these transactions are becoming popular, especially among large participants. These transactions often do not attract a transaction fee and were popular among the investors on the exchange.
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As per the Binance statement, moving forward, the company will support Indian regulators in the ongoing matters concerning WazirX.
“Binance believes in keeping an open dialogue with regulators, policymakers, and the law enforcement community as we collectively seek to establish a global regulatory framework for the industry,” he added. The move is on the back of recent regulatory action taken against Zanmai Labs, which owns popular cryptocurrency exchange WazirX.
“It has come to our attention that some users were given to believe that funds deposited in WazirX were managed by Binance. This is not the case,” Hillman clarified.
The relationship between Binance and WazirX turned sour after the Enforcement Directorate (ED) froze bank balances to the tune of Rs 64.67 crore of the directors of Zanmai. The public dispute has left about 15 million registered users on the platforms stranded. It is believed that Zanmai Labs, run by Nischal Shetty and other founders, will opt for a legal route.
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On August 5, Changpeng Zhao, CEO, Binance, stated in a series of tweets that Binance doesn’t own any equity in Zanmai Labs and only provides wallet services to WazirX as a technology solution. This sent shockwaves to the market especially, when Binance announced its acquisition of WazirX, in a blog post on November 21, 2019.