Binance detaches itself from any liabilities days after WazirX cyber attack

Global crypto giant Binance has distanced itself from any liabilities originating from a cyber attack on embattled crypto exchange firm WazirX, weeks after another wallet service provider, Liminal Custody, also levelled the blame for the breach on the homegrown crypto exchange.

In a blog, Binance clarified that the company does not own or operate WazirX in the country, adding that there was no legal basis for the firm to be liable for claims made against the embattled crypto exchange.

It refuted WazirX’s claims that the global exchange owns the company, while stating that it does not operate the platform.

“While a contract had been signed between the parties, the proposed transaction never closed due to Zettai’s failure to perform its obligations. Binance has never owned, controlled, or operated WazirX at any time, including before, during, or after the alleged hack,” the crypto platform said.

 

Zettai operates the crypto exchange WazirX in India.

In July, a security breach at the company resulted in the theft of over $230 million. This was close to half of the platform’s digital assets.

In 2019, the global crypto platform had announced that it had ‘acquired’ WazirX. However, it later stated that the acquisition was limited to an agreement to purchase some assets and intellectual property of WazirX.

WazirX’s user agreement states that Binance offers services on the platform, including peer-to-peer (P2P) transactions.

“Binance operated the token-related services while Zanmai India operated the INR related services. Binance subsequently announced its decision to cease providing services in relation to the Platform,” Nischal Shetty, founder and chief executive officer (CEO), WazirX declared in an affidavit. 

However, Binance has clarified that it does not provide any services on the WazirX platform, adding that the document was incorrect and misleading.

“Binance has strongly objected to the unauthorised references to Binance in the WazirX user agreement and demanded that references to Binance be removed from the WazirX user agreement. Yet, Mr Shetty, Zanmai, and related entities, who control WazirX, ignored these demands,” it added.

Nischal Shetty is the founder and chief executive officer of WazirX.

Subsequently, the world’s largest global crypto firm said it would not bear responsibility for the consequences of the cyberattack.

It said that it was not obligated to hold funds of WazirX’s users. 

The company added that it has extended assistance to WazirX after the breach was detected

“We have communicated with the WazirX team on fund recovery and have sought to assist where we can,” a Binance spokesperson said. 

“Once WazirX users’ funds were removed from Binance, Shetty and Zettai selected custody solutions provider Liminal to hold these assets. Binance was not consulted on this arrangement,” Binance said. 

WazirX blamed its wallet service provider Liminal Custody for the cyberattack. 

Liminal Custody clarified its systems were not compromised after the hack was first detected.

The case file

> Binance clarified that it does not own or operate WazirX in the country

> Zettai operates the crypto exchange WazirX in India

> In July, a security breach at WazirX resulted in theft of over $230 million

> WazirX’s user agreement states that Binance offers services on the platform including peer-to-peer transactions

> However, Binance has clarified that it does not provide any services on the WazirX platform adding that the document was incorrect and misleading