WazirX Breach: Binance Denies Ownership, Calls Out Shetty's Deflection

In the high-stakes world of crypto, trust is the only real currency. And right now, that trust is under serious strain for users of Indian-origin crypto exchange WazirX.

On July 18, 2024, WazirX reported a massive cyber-attack that wiped out digital assets worth $235 million—nearly half the platform’s holdings. Over a year later, customers still can’t access their funds. While legal filings, public statements, and affidavits swirl around, one thing remains heartbreakingly clear: ordinary users are left in the cold.

Binance to WazirX: Own Up

In a strongly worded statement, Binance—the world’s largest crypto exchange—has publicly distanced itself from the WazirX debacle, making one thing crystal clear: “We did not acquire, operate, or control WazirX—ever.”

And more importantly, Binance is now urging Zanmai Labs and Zettai Pte Ltd—the companies founded and operated by WazirX co-founder Nischal Shetty—to take full accountability for the funds lost under their custody.

“Their responsibility to WazirX users is unrelated to their dispute with Binance,” the company said. “Their attempts to shift responsibility are a disappointing deflection tactic.”

The $235M Question: Who’s Responsible?

At the center of the chaos is the compromised wallet—a multisignature account managed by five members of the WazirX team and one from Liminal, a third-party custody provider. Binance has firmly stated that it had no operational role in this wallet and was neither consulted nor involved in choosing Liminal.

According to WazirX, the cyberattack drained nearly half the exchange’s assets and forced the company to halt withdrawals. On August 27, 2024, Zettai filed for a moratorium in Singapore’s High Court, seeking protection from legal claims by users and creditors. In sworn affidavits supporting the plea, Nischal Shetty admitted that the platform would not be able to fulfill withdrawal requests.

However, those affidavits also contain claims attempting to suggest Binance might bear some responsibility—a suggestion Binance categorically rejects.

Binance’s Breakdown: 6 Key Facts

Binance laid out a detailed fact sheet countering Shetty’s claims:

1. Binance Never Acquired WazirX: A proposed acquisition deal fell through after Zettai failed to fulfill contractual obligations. Regulatory bodies like the Enforcement Directorate have confirmed that Zanmai Labs owns and operates WazirX, not Binance.

2. Ownership Dispute Irrelevant to User Claims: Binance emphasized that the ongoing legal dispute between Zettai and Binance will not transfer ownership of WazirX to Binance, nor will it make Binance liable for user losses.

3. Binance Is Not Party to WazirX’s User Agreement: Despite WazirX referencing Binance in its User Agreement, Binance asserts that these references were made without authorization and have been consistently objected to.

4. WazirX Funds Were Withdrawn from Binance in 2023: Binance had previously provided wallet infrastructureto Zanmai, as it does for other crypto players. But in January 2023, it requested Zanmai to move all funds, which was done. From that point, Binance held no user funds for WazirX.

5. The Custodian (Liminal) Was Chosen Solely by WazirX: Binance had no say in the custody arrangement after funds were removed from Binance. The compromised wallet was under full control of WazirX and Liminal.

6. Cyberattack Details Still Not Disclosed: Binance says it has repeatedly requested WazirX to share internal and external reports, including a Mandiant cybersecurity investigation report. But these requests have gone unanswered.

A Trust Deficit That Runs Deep

At its core, this is not just a technical dispute or a contractual quibble. It’s a crisis of user confidence. When a platform loses user funds, the burden of accountability cannot be dodged—no matter how complicated the backstory.

Legal observers say the case raises serious questions about platform governance, custody transparency, and the risks Indian users face when investing in crypto platforms operating in regulatory gray zones.

“This isn’t a Binance vs. WazirX story. It’s a user protection story,” said a crypto policy expert on condition of anonymity. “And right now, the silence from the WazirX team is deafening.”

After the Hack: What Comes Next for WazirX Users?

Binance has said it reserves the right to respond to Mr. Shetty’s allegations in the appropriate legal forums. But the company is making one thing abundantly clear in the public domain: it will not serve as a scapegoat.

Meanwhile, the user community—once among India’s most enthusiastic crypto investors—continues to wait for answers, refunds, or even basic transparency from the platform they trusted.

As India slowly builds out its crypto regulatory architecture through the Financial Intelligence Unit (FIU) and the Digital India Act, the WazirX case may well become a cautionary tale.

The WazirX incident is a wake-up call for the Indian crypto ecosystem. Beyond the headline-grabbing hacks and legal drama lies a harsh truth: when trust is lost, the entire promise of Web3 collapses.

It is time for WazirX’s operators—Zanmai and Zettai—to stop the blame game and step up. The users who lost millions deserve more than finger-pointing. They deserve accountability.