Summary

• Binance and WazirX dispute ownership.
• Binance demands retraction of previous statements.
• WazirX resists, claims Binance profited greatly.

Emails obtained by CoinDesk provide new information on the ongoing controversy surrounding the obscure and disputable ownership of WazirX, India's leading cryptocurrency exchange. In November 2019, the ownership of WazirX was not disputed and Binance, the world's largest crypto exchange, announced in a blog post that it had purchased the Indian exchange. WazirX's executives discussed the acquisition openly.

However, in the summer of 2020, the story changed when WazirX faced trouble with the Indian government. In early August, Indian officials raided WazirX's Mumbai office on suspicion of the exchange assisting 16 fintech companies in money laundering. Binance promptly took steps to disassociate itself from WazirX by amending the blog post celebrating the acquisition to state that the transaction was only "limited to an agreement to purchase certain assets and intellectual property." Binance CEO Changpeng "CZ" Zhao also tweeted that Binance had no equity in Zanmai Labs, the entity operating WazirX. Binance's spokesperson declared that reports of Binance's ownership of WazirX were false.

This resulted in months of public disagreement between WazirX and Binance over the true ownership of the Indian exchange. Binance claimed that the transaction never went through, while WazirX officials said it did and claimed to have proof, though it was never shared. This week, CoinDesk acquired WazirX's proof as the dispute was being privately resolved.

On January 26, the day of a national holiday in India, Binance sent WazirX a letter demanding that the Indian exchange meet two demands by the end of the month or risk having Binance terminate its service agreement with WazirX by February 3. Binance required WazirX to publish a pre-written "clarificatory statement" retracting WazirX co-founder Nischal Shetty's previous statements that Binance owned WazirX and to erase all references to Binance in its terms of service.

WazirX, officially known as Zanmai, responded to Binance's demands with a letter obtained by CoinDesk, resisting the demands and claiming that the demand letter was unethical and tried to use media pressure and threats to force Zanmai into issuing false and misleading statements.

In the letter to Binance's legal team and CEO, Shetty refused to retract his previous statements that Binance had purchased the Indian exchange. Shetty argued that Zanmai had not made any false or misleading statements regarding Binance's role and responsibility in operating the WazirX platform and Binance's control over WazirX's user assets. Shetty also claimed that Binance had profited greatly from its control of the exchange by withdrawing a significant amount of money earned as trading fees on the WazirX platform.

To support his claim, Shetty attached a partially redacted email chain between Brian Schroder, the CEO of Binance US, and Tushar Patel, the Vice President of Finance at WazirX, regarding an amended "share purchase agreement." The agreement, dated January 13, 2020, granted Binance ownership of certain WazirX accounts. The email chain indicated that the terms of the agreement allowed WazirX to continue accessing and operating these accounts for the benefit of Binance, which was designated as the absolute owner of these accounts.

If WazirX does not comply with Binance's requests, the demand letter made it clear that the relationship between the two exchanges will be severed. Sources from both exchanges have said that such an outcome would likely be devastating for WazirX, which, according to its proof-of-reserves report published on January