The conflict is still ongoing between two major cryptocurrency exchanges; Zanmai and Binance. Zanmai is the operator of WazirX, which is the largest cryptocurrency exchange based in India.
It’s been a while since the conflict has been ongoing between both entities and the heat is constantly growing.
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Binance Bans WazirX
Just recently, a blog post has been shared where it is mentioned that the largest exchange in the world is taking strict actions against WazirX.
The blog post suggests that the Binance exchange has discontinued the services and facilities that it was offering to the WazirX exchange.
Acknowledgment by Binance
It was on February 3, when Binance made an acknowledgment through a blog post.
For a long time, Zanmai has continued claiming that the Binance exchange is behind the operating of the WazirX exchange.
They continued claiming that the Binance exchange was involved in operating WazirX from the background.
Binance has confirmed that they had been providing services to the WazirX exchange. The exchange has announced that they had issued an ultimatum to WazirX on January 26.
They had warned them to retract their statements otherwise their services will be terminated. The exchange revealed that the users on the WazirX exchange will not be able to use the Binance wallet services.
Deadline until February 3
The officials at the Binance exchange have announced that the users on the WazirX exchange have until February 3 to withdraw their funds.
They have to withdraw their funds until February 3 comes to an end. The users must remove their funds by 23:59 UTC on February 3. Once the deadline is approached, the accounts will be closed on the WazirX exchange.
Binance has announced that Zanmai still has multiple wallets in the Binance exchange that hold a lot of funds belonging to the operator.
According to the exchange, the funds that Zanmai have in their wallets are for operational purposes.
WazirX Announced its Proof of Reserve
It was just a month back when WazirX had made an announcement pertaining to the users’ funds. The exchange announced that 90% of the funds of their users are held in the Binance wallets.
They went on to confirm that only 10% of the total funds are being held in the cold storage wallets.
The reason for sharing the holdings was to provide information about the proof of reserve. The exchanges started to reveal their proof of reserves in an attempt to ensure that their users’ funds were safe.
The practice was initiated back in November by Binance and it was voluntary information released by the exchange. Since then, multiple exchanges have shared information on their reserves.
Binance made the attempt after the FTX exchange crashed back in early November. Since then, the exchanges lost their reputation among investors.
They were withdrawing from the exchanges as they no longer wanted to invest in the platforms. Therefore, the exchanges had to come up with a strategy to regain the trust of the investors and users.
Finally, the strategy has worked out in favor of the exchanges and the users have come back. Unfortunately, the situation is not the same for WazirX as Binance is no longer willing to support it.
WazirX is Facing Major Problems
Since the past year, the exchange has been facing major problems in terms of its operations.
It was in 2022 when the WazirX exchange was accused by the local regulatory authorities of carrying out money laundering.
The regulators have claimed that the exchange was involved in laundering over $130 million in the year 2022.
After the scrutiny, the exchange had to block and suspend the accounts of multiple users. This is when the Binance exchange decided that it was in the right interest of their business to distance themselves from the exchange.
At that time, the Binance exchange claimed that it had no relation with WazirX exchange at all.