India’s largest crypto exchange follows Binance on stablecoins

India’s largest crypto exchange is following Binance on some dollar-pegged stablecoins, tipping the tables further towards the BUSD token.

Driving the news: The Exchange, WazirX, Monday said it has already stopped accepting new deposits denominated in USDC, USDP and TUSD – the dollar pegged stablecoins of Circle, Paxos and True. And all existing deposits would soon be automatically converted to Binance’s namesake stablecoin.

The context: The move follows Binance’s own decision to institute an automatic BUSD conversion feature and echoes its rationale for delisting competing stablecoins: to “enhance liquidity and capital efficiency” for the sake of his clients.

The plot: Some people think WazirX is actually a Binance-owned company, according to an acquisition announcement made around two years ago.

  • In August, however, Binance CEO Changpeng Zhao, or CZ, denied the closing of the transaction. India’s stock exchange at the time was mired in a regulatory investigation that resulted in enforcement asset freeze On the platform. (The exchange has since been reinstated.)
  • “Binance does not control or operate WazirX,” according to Binance spokesperson Lily Lee. WazirX did not respond to requests for comment.

Details: USDC, USDP, and TUSD spot market pairs will be delisted on WazirX on September 26, according to the company’s blog.

  • Withdrawals in this denomination before the BUSD-auto conversion will be supported until September 23.
  • Customers can still withdraw their stablecoins from WazirX in these three stablecoin denominations.
  • To note: WazirX customers seem to have been even less knowledgeable than Binance customers, who learned of the news in early September.

The big picture: Binance is the largest crypto exchange in the world, and although its BUSD is now the third-largest dollar-pegged stablecoin behind Tether’s USDT and Circle’s USDC, it looks set to close.

  • Yes, but: Size also indicates high regulatory responsibility. (Read: scrutiny)

Between the lines: Public spat on who owns WazirX erupted on the heels of India’s Enforcement Directorate investigation of the exchange’s parent company, Zanmai Labs, for allegedly authorizing money laundering occur on the platform.

  • Indian regulators alleged that Zanmai Labs “created a network of agreements with – Crowdfire Inc. USA, Binance (Cayman Islands), Zettai Pte Ltd Singapore – to obfuscate ownership of the crypto exchange,” following research conducted on one of the administrators of Zanmai.

Catch up fast: CEO CZ last month denied the acquisition via Tweeter: “This transaction was never finalized. Binance has never – at any time – held shares of Zanmai Labs, the entity operating WazirX.”

  • This prompted WazirX founder Nischal Shetty to repel at the request of CZ.
  • CZ then acknowledged that Binance provided wallet services for WazirX and that control of the WazirX domain had been transferred to its control. He additionally has versus“We could stop WazirX. But we can’t, because… it hurts users.”

Meanwhile, Binance Updated November 2019 WazirX-acquisition announcementclarifying that the acquisition only involved “certain assets and intellectual property of WazirX”.

  • Days after the spat and updated acquisition announcement, Binance deleted the ability for users to make off-chain transfers between its exchange and WazirX.

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