Security and protection of user funds is a fundamental responsibility of any cryptocurrency platform. We call on the WazirX team under Zanmai/Zettai to be accountable to WazirX users and compensate them for the funds lost under Zanmai/Zettai management. Their liability to WazirX users is unrelated to their dispute with Binance. And trying to shift responsibility is a disappointing distraction tactic that shouldn't distract from the glaring issue at hand here: the need for the WazirX team to be held accountable for user funds lost under their management.  

  • On July 18, 2024, the WazirX platform reported that it had suffered a cyberattack on a wallet that held WazirX users' funds. This hacked wallet was a multi-signature wallet that had five signers from the WazirX team and one signer from Liminal, a third-party storage solutions provider that the WazirX team engaged. Binance was in no way involved in the transactions with the compromised wallet.  

  • The WazirX team and Nishal Shetty continue to mislead WazirX customers and the market about the relationship between WazirX and Binance. Binance never owned, controlled or operated the WazirX platform, including before, during or after the July 2024 attack. On the other hand, Zanmai, a company incorporated in India, is an organization that registered the WazirX platform with the Financial Intelligence Unit of India in 2023 and is recognized by the Authority compliance with Indian law by WazirX's owner.

  • Binance is not responsible for the operation of the WazirX platform and the consequences of a possible hack. Zanmai/Zettai and their affiliates acknowledge that they still operate the WazirX platform and that Binance was not involved in the operation of WazirX or the hacked wallet at the time of the attack. 

  • Binance is not a party to the WazirX User Agreement and references to Binance in this Agreement are not permitted. 

Prerequisites

WazirX, a platform operated by Zanmai, reported that it suffered a cyber attack on July 18, 2024, resulting in the loss of user funds with a market value of about US$235 million. The alleged hack resulted in withdrawal requests from WazirX customers, which WazirX is still unable to fulfill. On 27 August 2024, Zettai Pte Ltd, a legal entity incorporated in Singapore, applied to the High Court of Singapore for a moratorium to prevent class actions by creditors (i.e. customers of WazirX). Nishal Shetty, the principal owner of Zettai, subsequently filed two affidavits in support of the claim.  

Mr. Shetty confirmed that the cyber attack "is the theft of digital assets, which is about half of the Platform's digital assets" and that "the Platform will not be able to fulfill" the withdrawal requests.

In his affidavit, Mr. Shetty made several inaccurate statements regarding the ongoing dispute between Zettai and Binance. Mr. Shetty's accusations make it clear that he is trying to deflect blame and claim that Binance may be somehow responsible for the losses suffered by WazirX users and lenders as a result of the cyber attack. This is not true, and assumptions of this kind are misleading.

Binance considers it necessary to correct a few basic inaccuracies to help the user community see the situation and key facts more clearly. However, the following is not intended to be a comprehensive response to Mr. Shetty's claims or the contentious matters related to Zettai and their affiliates. Binance reserves all rights to provide further comments in the appropriate forum. 

Facts

1. Binance did not buy WazirX

Mr. Shetty claims that Binance acquired ownership and control of WazirX.

As we noted before, Binance never bought or controlled WazirX. Although a contract was signed between the parties, the proposed transaction was never closed due to Zettai's default. Binance never owned, controlled or operated WazirX, including before, during or after the alleged hack. 

On the other hand,

Throughout, Mr. Shetty's team retained ownership and control of WazirX. Zanmai, Zettai and Mr. Shetty admit that they are still in business and have always run WazirX. For example, Mr. Shetty publicly stated on his social media account on September 30, 2023 that "I still operate the WazirX platform".  

2. Regardless of the outcome of the dispute, Binance does not own or operate the WazirX platform 

Mr. Shetty speculates that the outcome of the ongoing dispute between Zettai and Binance could result in Binance de facto owning WazirX, and that this would result in Zettai's creditors becoming Binance's creditors, meaning Binance would be responsible for reimbursing WazirX users . This is not true. 

Who owns or controls WazirX is not an issue that will be resolved in the current dispute. As we have explained many times before, Binance does not own or control the WazirX platform. Zettai and its affiliates acknowledge that they still operate WazirX. In dispute, Zettai and its affiliates do not claim that Binance is the owner, controller or operator of WazirX. 

In no event is there any legal basis for asserting that Binance will be liable for claims against Zettai (see below). Any suggestions made by Mr. Shetty in this regard are false.

3. Binance is not a party to the WazirX User Agreement with WazirX users

Mr. Shetty claims that Zanmai only provides INR-related services on WazirX, while Binance provides cryptocurrency-related services, citing the WazirX User Agreement as proof. This is not true. Specifically, the Compliance Authority of India found that the Zanmai team had given "contradictory and ambiguous answers" on the subject in order to "avoid the scrutiny of Indian regulators".

Binance does not and has never provided cryptocurrency-related services to WazirX users as described in the WazirX User Agreement. As we said before, Binance previously provided Zanmai wallet services as a technology solution for their WazirX exchange operations, as we do for many other third parties. Binance has never operated the WazirX platform.

Providing these wallet services was not unique to Zanmai – it was similar to the arrangements we have with numerous other Virtual Asset Service Providers (VASPs) around the world, including through our Binance Link Program . These VASPs use our technology and infrastructure to run their business independently. These other VASPs rightly do not claim that Binance provides services to their customers and do not name Binance as a contractual counterparty to their users.

The WazirX User Agreement, which implies that Binance provides services to WazirX users, is incorrect and misleading. Links to Binance in the WazirX User Agreement have never been authorized or endorsed by Binance. Binance has strongly opposed unauthorized references to Binance in the WazirX User Agreement and requires the removal of references to Binance from the WazirX User Agreement. However, Mr. Shetty, Zanmai and related entities that control WazirX have ignored these demands.  

Since Binance does not own or control the WazirX platform, as we explained above, it cannot change the WazirX User Agreement.

In addition, a dispute between Zettai and Binance will not cause Binance to become a party to the WazirX User Agreement. Zettai does not wish to make/receive any representations regarding the WazirX User Agreement.

4. Binance does not hold WazirX user funds

As we explained above, like many other cryptocurrency exchanges, WazirX previously used cryptocurrency wallets hosted on Binance. WazirX did this before the potential acquisition of WazirX by Binance, which ultimately never happened.

In January 2023, Binance notified Zanmai and another Zanmai affiliate that they had withdrawn funds from several Binance cryptocurrency wallets (which also contained WazirX user funds). As Mr. Shetty confirmed in his affidavit, his team withdrew the funds. From this point on, there are no WazirX user funds left on Binance.   

5. Binance is not responsible for the consequences of a cyber attack

Mr. Shetty suggests that Binance is somehow responsible for the fallout from the cyberattack, as Binance requested the withdrawal of WazirX users' funds from Binance wallets. This is not true. Binance is not responsible for the consequences of an alleged hack.

Binance is not required to hold WazirX user funds and advised that WazirX user funds should be withdrawn from Binance wallets well in advance of the attack, which Mr. Shetty's team did.

After the funds of WazirX users were withdrawn from Binance, Mr. Shetty and Zettai chose storage solution provider Liminal for these assets. Binance was not privy to this deal and had no knowledge of it. The selection of the new custodian was solely the decision of Mr. Shetty and Zettai. Additionally, the WazirX team confirmed that they and Liminal (not Binance) were signatories to the wallet, and that the compromised wallet was managed using Liminal's services, not Binance's. 

Binance was unable to verify the alleged cyber attack. We asked the WazirX team to provide us with their reports on the incident, including all internal reports, as well as a purported report from Mandiant dated August 14, 2024 detailing the cause of the attack and verifying the amount and share of user funds, but these requests have gone unanswered . We are once again asking the WazirX team to provide their reports on the details of the attack. 

According to Liminal, an investigation by Grant Thornton "confirmed the security of Liminal's interface and server infrastructure" and concluded that the cyber attack "occurred outside the infrastructure Liminal".  More information is available here and here. 

6. Mr. Shetty's statements are inaccurate and misleading

Zettai and Mr. Shetty continue to mislead WazirX customers and the market and spread inaccurate information, including in affidavits filed in the High Court of Singapore. 

In light of the constant misinformation spread by the Zettai team and Mr. Shetty, it is imperative for WazirX users and the entire market to understand that Binance never owned, controlled, or operated WazirX, particularly during the alleged July 2024 hack. Binance is not responsible for the operation of the WazirX platform or the consequences of the attack.

Despite Mr. Shetty's attempts to deflect blame and falsely accuse Binance, the facts remain clear: Binance is not a party to the WazirX User Agreement, has never owned or operated WazirX, and does not own WazirX user funds. We urge the user community to stay informed and critical of the misleading statements made by Mr. Shetty, as Binance remains committed to transparency and user protection. We trust that users will be able to draw their own conclusions in light of these facts.

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