Binance Denies Responsibility as WazirX Hack Fallout Intensifies

A bitter blame game is unfolding in the crypto world as Binance, the world’s largest cryptocurrency exchange, vehemently denies any responsibility for a massive hack that drained WazirX users of nearly $235 million. Binance is publicly accusing WazirX’s leadership of “misleading customers” and employing “disappointing deflection tactics” to avoid accountability for the devastating cyberattack that occurred in July 2024.

Binance and WazirX: A Complex Crypto Tug-of-War

The conflict stemmed from the complex and contested relationship between Binance and the troubled Indian crypto exchange, WazirX. Binance insisted it “never acquired or controlled WazirX,” despite a previously signed agreement, due to WazirX’s alleged failure to fulfill its obligations. WazirX, however, maintained that Binance played a more significant role in its operations, pointing to references to Binance in its User Agreement.

The July 2024 cyberattack, which targeted a multisig wallet holding WazirX user funds, ignited this simmering conflict. WazirX, unable to meet withdrawal requests from panicked customers, has been seeking a moratorium to prevent creditors from taking collective action. Nischal Shetty, WazirX’s CEO, filed sworn affidavits claiming Binance bears some responsibility for the losses, allegations Binance vehemently denied.

📢 Moratorium Application Filed in Singapore Court

We wish to update all users of the WazirX Platform that we have taken the next step to address users' crypto balances following the 18 July 2024 cyberattack by filing for a moratorium with the Singapore High Court under the… pic.twitter.com/7IYES7pc6h
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) August 28, 2024

Binance Denies Responsibility and Questions the Hack

In a scathing statement, Binance meticulously refuted Shetty’s claims, stating: “Binance has no responsibility for the operation of the WazirX platform and the consequences of the alleged hack. Zanmai/Zettai and their affiliates accept that they still operate WazirX and that Binance was not involved in the operation of WazirX or the compromised wallet at the time of the attack.”

Binance asserted that it previously provided wallet services to WazirX, similar to arrangements with numerous other crypto platforms, but that it never controlled the exchange’s operations. Furthermore, Binance revealed that it had instructed WazirX to withdraw user funds from Binance wallets in January 2023, long before the hack occurred. “From that point onwards,” Binance’s statement read, “no WazirX user funds remained with Binance.”

Binance claimed it had no knowledge of WazirX’s subsequent choice of a new custodian, Liminal, and maintained it was not involved in the compromised wallet’s operation. The company also casted doubt on the validity of the hack, stating it has “not been able to verify the alleged cyber-attack” and has requested, but not received, WazirX’s internal reports and a purported report from Mandiant detailing the cause of the attack.

Binance published a blog post about WazirX

Binance called on the WazirX team to “be accountable to WazirX users and compensate them for the funds that have been lost.”

Binance further said, “Despite Mr. Shetty’s attempts to deflect blame and falsely implicate Binance, the facts remain clear: Binance is not a party to WazirX’s User Agreement, has never owned or operated WazirX, and does not hold any WazirX user funds. We urge the user community to stay informed and critically evaluate the misleading statements made by Mr. Shetty, as Binance remains committed to transparency and user protection. We trust users to be able to come to their own conclusions in light of these facts.”

This public battle has left WazirX users caught in the crossfire, their funds inaccessible while the two crypto giants engage in a war of words.

Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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