Binance and WazirX Play the Blame Game, Users Stand By
September 18, 2024 03:00 AM
Reading time: 1 minute, 49 seconds
TL;DR The July 18th hack on WazirX resulted in a staggering $235 million loss, affecting a multi-sig wallet used by WazirX and custodian Liminal. During the incident, Binance denied any responsibility, clarifying its lack of ownership and control over WazirX. The legal battle between the two platforms continues as users await resolution.
The Hack and Its Aftermath
WazirX, a leading cryptocurrency exchange, was hacked on July 18th, resulting in a catastrophic loss of $235 million in user funds. The breach targeted a multi-sig wallet managed by WazirX and its custodian partner, Liminal. The event has left the platform in a dire financial state, unable to meet the withdrawal demands of its users.
Binance's Stance
In response to the incident, Binance, a major player in the crypto space, has distanced itself from the fiasco. In a recent blog post, Binance made it clear that it neither owned nor controlled WazirX at the time of the hack. The post also stated that Binance had no responsibility for the lost assets.
Binance's assertion came as a rebuttal to WazirX co-founder Nischal Shetty's affidavit, which hinted at Binance's involvement in the losses.
"Binance has flatly rejected such claims, stating that they have never had a stake in WazirX or owned it or controlled it in any way."
Clarifying Business Ties
To clear the air, Binance elaborated on the nature of its relationship with WazirX. According to the blog post, Binance and WazirX have had no business ties since their disputes.
Contrary to popular belief, WazirX is owned and operated by an Indian company called Zanmai InfoTech. Binance also disclosed that it had offered WazirX wallet services until January 2023, after which WazirX chose Liminal as its new custodian partner for user funds.
The Legal Implications
The hack has not only strained WazirX's finances but also led to legal repercussions. Zettai Pte Ltd, WazirX's Singapore-based parent company, has sought a moratorium in the Singapore High Court.
This move aims to protect the company from creditors trying to seize its assets, including those belonging to WazirX users. Nischal Shetty revealed that the hack wiped out nearly half of WazirX's cryptocurrencies, rendering the platform insolvent.
Ongoing Dispute
The legal tussle between WazirX and Binance continues, with both parties presenting their sides of the story. While Binance maintains its innocence, WazirX management is under pressure to take responsibility and compensate affected users.
As the consequences of the hack persist, WazirX users remain in a state of uncertainty, wondering about the outcome of this high-stakes dispute.
