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Investors fear loss after ED probes WazirX, many opt for withdrawal

Users are also puzzled after a war of words took place between WazirX CEO Nischal Shetty and Binance CEO Changpeng Zhao on Twitter.

The action comes days after the ED served WazirX a notice under the FEMA Act. (wazirx.com)

Twenty-four-year-old Akshay Golellu, a cryptocurrency investor has withdrawn his digital assets from WazirX, India’s largest cryptocurrency exchange. “I didn’t want to risk my hard-earned savings. It could be just a matter of time before we won’t be able to withdraw or deposit, especially with the authorities taking action against the company.” He sums up the feeling of thousands of investors who fear that the recent action against WazirX could lead the company from halting withdrawal services.

On Friday, the Enforcement Directorate (ED) said that it had frozen bank balances of Rs 64.67 crore belonging to WazirX. According to the ED, Chinese loan lending companies that were shut down in India diverted their funds through crypto exchanges, and the maximum amount of funds was diverted to the WazirX exchange.

Users are also puzzled after a war of words took place between WazirX CEO Nischal Shetty and Binance CEO Changpeng Zhao on Twitter. Zhao made it clear that it does not own WazirX, as there was “no transfer of shares”. However, Shetty said that Zanmai Labs, the entity that owns WazirX has a license from Binance to operate INR-crypto pairs. Further, he said that Binance operates crypto to crypto pairs, and processes crypto withdrawal for the company.

“Does this mean I cannot facilitate transactions from WazirX to Binance? Will WazirX shut down,” asked Ritesh Kavellu, 28, another crypto trader. Currently, Binance has removed the functionality for users to transfer their funds from WazirX to the Binance app.

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Zhao tweeted, “Binance only provides wallet services for WazirX as a tech solution. There is also integration using off-chain transactions, to save on network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user sign-up, KYC, trading and initiating withdrawals.”

Indianexpress.com could independently verify that INR deposits and withdrawals are both available on WazirX. “We have not suspended any deposits or withdrawal services. We can assure that users’ crypto is safe and in fact, we are the only company that has ensured that we are in full compliance with the authorities,” Rajgopal Menon, Vice President at WazirX told indianexpress.com.

First published on: 08-08-2022 at 01:18:35 pm
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