The recent rift between WazirX and Binance has once again brought the limelight on volatility of the cryptocurrency market in India. It is believed that most of the investors as well as potential investors are now concerned more than ever on the fact that whether they should continue to transact cryptocurrency with WazirX, without the exchange being backed by Binance. According to Rajagopal Menon, vice-president, WazirX, its early to talk about investor movements. “Movement to international exchanges can make investors non-compliant with government norms, and investors will have to bear the burden of one percent tax deductible at source (TDS). Rupee withdrawals are working, and I believe there are no issues in terms of structural viability of the company,” he told FE Digital Currency, adding that investors’ cryptocurrency is safe with them.
However, industry experts opined that WazirX is expected to make a recovery from this phase. According to Pratik Gauri, CEO, 5ire, a blockchain platform, WazirX’s main concern should be to regain the trust of consumers. “Many investors have lost trust in exchanges due to current conditions around the Indian cryptocurrency market. WazirX should take quick measures to ensure that they don’t face any problems or lose money,” he emphasised.
While WazirX has come under scrutiny for its actions, Binance seems to have escaped unscathed from. “I believe that the regulatory oversight around Binance is not that high, compared to banks and financial institutions. Despite that, we haven’t seen any examples of fraudulent activities by the company since its incorporation. I don’t think it’ll have an impact,” Ajeet Khurana, founder, Reflexical Pte Ltd, a Web3.0 platform, said.
To give perspective, on August 5, 2022, Enforcement Directorate (ED), a government agency, declared that WazirX’s bank assets worth Rs 64.67 crore had been frozen. In response to this, Changpeng Zhao, CEO, Binance, through a series of tweets, officially clarified that his company never completed the acquisition of WazirX.