Binance-WazirX exchanges’ relationship clarified after long row; implications for WRX token price

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• New reports indicate Binance exchange controls WazirX exchange’s WRX token and conducted the IEO for it.
• The giant exchange also manages and controls the wallets holding locked and released WRX tokens.
• Despite a five-quarter delay, the CZ-led firm is also responsible for conducting the quarterly burn of WRX tokens.
• The uncontrolled supply indicates the struggle for the altcoin’s price performance based on the supply-demand principle.

WazirX exchange has finally clarified its relationship with Binance, saying the largest crypto exchange by trading volume controls the WRX token.

The India-based exchange also noted that Binance conducted the initial exchange offering (IEO) for its ticker, WRX, with confirmations that the Changpeng Zhao (CZ)-led firm kept all sale proceeds from the IEO.

Also Read: Ledger fights customers’ “betrayal” claims; could restore increased faith in CEXs like Binance

WazirX vs. Binance

The feud came after Binance stopped offering wallet services to WazirX with demands that the Indian exchange removes its assets from Binance. The matter escalated to Binance declaring the termination in a blog post. At the time, the leading exchange said the move resulted from WarziX’s owner, Zanmai Labs, making misleading statements concerning their relationship.

This prompted an ultimatum from Binance:

Retract the statements and continue using the wallet services or end the partnership.

From Binance’s point of view, Zanmai’s response was unsatisfactory, leading to the termination of the partnership.

The two then set a February 3, 2023 (23:59 UTC) deadline to resolve the issue, which entailed Zanmai pulling funds from the WazirX operation accounts. Binance also allowed Zanmai to arrange the withdrawal of any remaining assets.

WazirX Exchange clarifies Binance relationship after a long row

WazirX has revealed new revelations to end the long row between the Indian firm and Binance. The news came in a Twitter announcement on the exchange’s official account, bringing clarity to contentious aspects of the debacle that has lasted months.

Based on the announcement, Binance controls and manages the wallets that hold locked and released WRX tokens and determines when these tokens are released in line with the WRX Release Schedule. The Indian exchange has supported the claims with a list of wallet addresses showing that Binance currently holds 580.78 million locked and unlocked WRX tokens.

Reportedly, from these unlocked tokens, Binance moved 11.68% of its WRX token holdings (116.8 million WRX tokens) to a treasury account on Binance.com in four different transactions spread across different dates. This marked the last burn event for the October-December 2021 quarter. In this burn series, the flagship exchange burned 9,633,333 WRX, equivalent to ₹47 Crores INR ($6 million) during the seventh burn event. 

Moreover, the WazirX team, assured of never receiving any token allocations, said that Binance is responsible for the quarterly burn of WRX tokens. Notably, Binance has not performed the quarterly burn of WRX tokens for the past five quarters beginning January 2022.

WazirX proceeded to disclose details of the pending burns, indicating the number of WRX to burn in individual periods.

It should be noted that token burning in cryptocurrency is the process of permanently removing existing tokens from circulation by storing them in a dead wallet that is never accessed.

The strategy helps combat inflation risk while creating an environment for the value of the remaining tokens to appreciate. The hallmark of token burning is “less supply = high demand.”

Impact on WazirX (WRX) price; action is on the lower timeframe

The two exchanges have been at odds for months, and with the new development, WRX holders hope that the new settlement presages a calm period for the exchange, with anticipations that WRX tokens will start to pump.

At the time of writing, WazirX (WRX) price is $0.125, a daily drop of around 5%. Nevertheless, the altcoin is up 0.5% in the lower timeframe. This points to a possible trend reversal in the WRX market after the latest development as the $0.120 support level has come to play.

WRX/USDT 1-hour chart

As shown in the one-hour timeframe (above), WRX is close to a previous swing low, from which it bounced around May 12 in tandem with the Relative Strength Index (RSI). With sufficient bullish momentum, WazirX price could pivot around this level to initiate a recovery. Traders could place the stop loss below $0.120. 

Considering the RSI is currently hinting at a possible upward move, WazirX price could also rise. Notice, also, the buy signal, which would be confirmed once the RSI crosses above the signal line (yellow band), also favoring the upside.