Closing off-chain fund transfers with WazirX: Binance

Closing off-chain fund transfers with WazirX: Binance

Effective August 11, Binance will stop supporting off-chain fund transfers between the WazirX exchange and Binance via the “Login with Binance” option after the Enforcement Directorate froze WazirX’s bank deposits worth ₹64.67 million

Global crypto exchange Binance on Monday announced that it is closing off-chain fund transfers with WazirX, which is facing an investigation for transferring ₹2,790 crore worth of crypto assets to unknown wallets.

The Enforcement Directorate (ED) on Friday said it has frozen bank deposits worth ₹64.67 crore of WazirX as part of its ongoing money laundering probe against some fraudulent smartphone-based lending apps “backed” by Chinese funds.

“To provide clarity and protection for users, we are removing the off-chain funds transfer channel between WazirX and Binance,” Patrick Hillmann, Binance’s director of communications, said in a statement.

Effective August 11, 2022 at 03:00 Coordinated Universal Time (UTC), Binance will stop supporting off-chain fund transfers between the WazirX exchange and Binance through the “Login with Binance” option, the statement said.

Users will still be able to deposit and withdraw balances through the standard withdrawal and deposit process between Binance and WazirX.

Off-chain transactions are those transactions that take place outside of the cryptocurrency network’s blockchain.

The ED said it raided Sameer Mhatre, director of Zanmai Lab Pvt Ltd, (which owns WazirX), on August 3 because he did not come forward with the information sought from him and was “uncooperative”.

The federal agency said in a statement that the exchange and its executives “provide contradictory and ambiguous answers to evade the scrutiny of Indian regulatory agencies.”

The agency said it found that a number of fintech companies involved in “predatory lending” through mobile apps in the country “diverted maximum amounts of funds to the WazirX exchange and the crypto-assets thus purchased were redirected to unknown foreign wallets.”

It was found that some users were convinced that the funds stored in WazirX were managed by Binance, but this is not the case, the global crypto exchange said.

“Binance will continue to support Indian regulators in the ongoing matters regarding WazirX. Binance believes in maintaining an open dialogue with regulators, policymakers and the law enforcement community as we work together to create a global regulatory framework for the industry,” the company said.

Minister of State for Finance Pankaj Chaudhary said in a parliamentary reply that a show cause notice has been issued against WazirX under the provisions of FEMA for allowing the transfer of Rs 2,790 crore worth of crypto assets to unknown wallets.

Further, in another case, it is recorded that WazirX allowed the request of foreign users to transfer one cryptocurrency to another on its own platform and also by transferring from third-party exchanges, namely FTX, BINANCE, etc., he said.

Sanjit
Sanjit

I am Sanjit Gupta. I have completed my BMS then MMS both in marketing. I even did a diploma in computer software and Digital Marketing.

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