“We have always assumed Binance was WazirX’s owner. Last year, around the time of their anniversary in July, Binance even–handed all of us WazirX staff Apple watches, according to a former employee who asked to remain anonymous.
The employee said that although other Indian exchanges provided lucrative ESOPs to new hires, WazirX did not grant employee stock options to its personnel.
“Because the ESOP market is unstable, we have brought up this issue numerous times. But we’ve always been informed that Binance owns it, so ESOPs are not an issue,” the employee stated.
An unintentional can of worms was opened in the already troubled cryptocurrency market by India’s Directorate of Enforcement (ED) inquiry into predatory and bogus Chinese loan apps.
Over the weekend, a verbal spat broke out, prompting inquiries about the ownership of WazirX, the Indian cryptocurrency exchange with the highest trading volumes.
The CEO of Binance, Changpeng Zhao, popularly known as CZ, stated that the company “never—at any point—owned any shares of Zanmai Labs, the entity operating WazirX,” following the announcement in November 2019 that Binance had bought WazirX.
His tweets began a short while after the ED said in a statement on August 5 that Zanmai Labs, the business that owns WazirX, set up a web of contracts with Crowdfire Inc., Binance (Cayman Islands), and Zettai to “obscure the ownership of the crypto exchange.”
Organization and ownership
Nischal Shetty, Siddharth Menon, and Sameer Mhatre established WazirX in 2018.
According to the most recent regulatory papers accessible through Tofler, the cryptocurrency exchange increased the number of its crew over the previous year to 250 while income increased to Rs 105 crore in FY21 from Rs 26 lakh a year earlier.
According to regulatory records, Shetty and Mhatre serve as directors of Zanmai Labs. Zettai, a Singapore–registered corporation, controls 99.99 percent of Zanmai Labs, with Shetty owning the remaining 0.01 percent.
The three cofounders each own a portion of Zettai, with Shetty having the greatest stake (74.3 percent). Menon and Mhatre each control 7.2 percent of the total.
However, WazirX, Binance, or any of these companies were not included in the payslips given to the exchange’s employees. According to the former employee, Qizil21 Softwares was stated on the paystubs. According to the information that is currently accessible, Shetty, Mhatre, and Shetty’s wife Moujhuri Guha are the company’s directors.According to regulatory documents, Shetty and Guha have 60 and 40 percent of the company’s shares, respectively.
The other component of this WazirX case involves two cofounders leaving India. Some workers claimed to Moneycontrol that they were not notified of Shetty and Menon’s decision to relocate their base to Dubai.
On February 16, Moneycontrol was the first to reveal that the two cofounders had left active business operations. In February, Shetty founded Shardeum, a decentralised blockchain platform. The Layer–1 Web3 company informed its audience that it is nearing completion of a $18.28 million seed round.
Menon is putting the last touches on Tegro, a marketplace for Web3 game assets.
How the argument ended
According to the ED’s statement, Shetty first informed the inquiry group that WazirX controls all cryptocurrency–to–cryptocurrency and rupee–to–cryptotransactions and merely has an IP and preference agreement with Binance.