Indian cryptocurrency exchange WazirX recently provided additional clarity regarding its relationship with the world’s leading crypto exchange, Binance. In a blog post, WazirX disclosed that Binance controls the WRX token, shedding light on the initial exchange offering (IEO) and the subsequent management of the token. This revelation has raised concerns, particularly as Binance has failed to conduct quarterly burns for the past five quarters. In this article, we delve deeper into the details of WazirX’s ties with Binance, the concerns raised, and the potential implications for the WRX token and its users.
Binance’s Control Over WRX Token
WazirX confirmed that Binance conducted the WRX token IEO, retaining all the proceeds from the sale, which amounted to nearly $2 million. Currently, Binance holds a significant amount of WRX tokens, with a total of 580.78 million locked and unlocked tokens. Of the unlocked WRX tokens, Binance transferred 116.8 million (11.68% of the total supply) to a treasury account on binance.com through multiple transactions. Notably, WazirX clarified that their team did not receive any token allocations from Binance, further emphasizing the control that Binance maintains over the WRX token.
WazirX highlighted Binance’s responsibility for conducting quarterly burns of WRX tokens. However, the exchange revealed that Binance has failed to carry out the token burns for the past five quarters, starting from January 2022. The most recent burn event, covering the period of October to December 2021, took place on March 9th, 2022, when approximately $6 million worth of WRX tokens were burned. The absence of subsequent burns has raised concerns about the commitment of Binance to the project and its impact on the WRX token’s value.
Implications for WazirX and WRX Token Holders
The lack of transparency regarding the management of WRX tokens has left WazirX users in the dark for an extended period. Although the news of Binance’s control over WRX tokens did not cause a significant immediate impact on the token’s price, there are potential implications for both WazirX and WRX token holders.
For WazirX, this revelation adds fuel to an ongoing feud with Binance over the ownership of the exchange. Previously, Binance ceased providing wallet services to WazirX and requested the Indian crypto exchange to withdraw its assets from Binance wallets. The failure of Binance to conduct quarterly burns for an extended period might indicate a lack of commitment to the project, potentially raising concerns about the future relationship between the two exchanges.
For WRX token holders, the lack of regular token burns raises questions about the scarcity and value of the token. Token burns are typically intended to reduce the token’s supply, thereby potentially increasing its value. However, the absence of regular burns can impact market sentiment, as investors may perceive a lack of commitment from Binance, affecting the long-term prospects and stability of the WRX token.
Conclusion
The recent disclosure by WazirX regarding Binance’s control over the WRX token has shed light on the initial exchange offering conducted by Binance and subsequent token management. The revelation that Binance has failed to conduct quarterly burns for the past five quarters raises concerns about the commitment and future direction of the WRX token. This lack of transparency and potential abandonment of the project by Binance has implications for both WazirX and WRX token holders.
