Binance to cease off-chain fund transfers with WazirX

Off-chain fund transfers are transactions occurring outside the blockchain network. Due to their zero/low cost or gas fee, off-chain transactions have been popular.

Following a series of tweets from its CEO Changpeng Zhao (known as CZ), Binance on August 8 said it will remove the off-chain fund transfer channel between WazirX and Binance from August 11.

Off-chain fund transfers are transactions occurring outside the blockchain network. Due to their zero/low cost or gas fee, off-chain transactions have been popular.

CZ on Twitter said he was not sure who started the feature but added, “I think it came at a time when ETH gas fees were $10 per transfer.”

Moneycontrol reported it first on Monday morning.

Patrick Hillman, Chief Communications Officer, Binance said in a statement, “At Binance, we prioritize the protection of users and the community. As a result of the recent regulatory action taken against Zanmai Labs Pvt Ltd, in relation to their operations of the WazirX Exchange, it has come to our attention that some users were given to believe that funds deposited in WazirX were managed by Binance. This is not the case.”

“In order to provide clarity and protection for users, we are removing the off-chain fund transfer channel between WazirX and Binance. Effective from 2022-08-11 03:00 (UTC), Binance will cease to support off-chain fund transfers between WazirX Exchange and Binance via the “Login with Binance” option,” Hillman added.

Users will still be able to deposit and withdraw balances through the standard withdrawal and deposit process between Binance and WazirX.

After complaints from the Enforcement Directorate (ED) regarding Binance not being very responsive to its queries, Hillman also noted that going forward Binance will actively support Indian regulators in the ongoing matters concerning WazirX.

"Moving forward, Binance will support Indian regulators in the ongoing matters concerning WazirX. Binance believes in keeping an open dialogue with regulators, policymakers, and the law enforcement community as we collectively seek to establish a global regulatory framework for the industry," Hillman stated.