Binance says it does not manage WazirX users’ funds

economictimes.indiatimes.com:

crypto exchange Binance said it would remove off-chain fund transfers with WazirX, three days after the Directorate of Enforcement (ED) raised concerns about such transactions. ET first reported on August 8 that Binance had disabled off-chain transfers with WazirX. Off-chain transfers, as the name suggests, are those that take place off the blockchain to save time and money.

“In order to provide clarity and protection for users, we are removing the off-chain fund transfer channel between WazirX and Binance. From August 11, Binance will cease to support off-chain fund transfers between WazirX and Binance via the ‘login with Binance' option. Users will still be able to deposit and withdraw balances via the standard withdrawal and deposit process between Binance and WazirX,” said Patrick Hillman, chief communications officer, Binance.

On Friday, the ED said lax know-your-customer (KYC) norms, loose regulatory control of transactions between WazirX and Binance, not recording transactions on blockchains to save costs, and not recording KYC of the opposite wallets ensured that WazirX was “not able to give any account for the missing crypto assets”. The ED said it had recently conducted searches on one of the directors of Zanmai Labs and issued a freezing order on its bank accounts, which contain Rs 64.67 crore. According to the agency, the exchange “actively” helped 16 fintech companies that are under investigation on charges of money-laundering to divert the alleged proceeds of crime using crypto.