India’s Shardeum Closes $18.2M Seed Funding Round, Valuation at $199M

India-based Shardeum ended its $18.2 million seed funding, raising a valuation of $199 million.

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According to Sharedeum, co-founded by Indian exchange WazirX’s founder and blockchain architect Omar Syed, the seed round had over 50 investors who participated, including Spartan Group, Big Brain Holdings, Jane Street and Foresight Ventures.

The funding round was conducted through a private token sale, and the company is expected to launch in the first quarter of next year and will later stage a public token sale. 

Balaji Srinivasan, former chief technology officer of Coinbase, said, “I invested in Shardeum as I think they are trying an interesting approach to scaling, which increases TPS as more validation nodes are added.”

In comparison, Shardeum’s $18 million raise is an adequate size for a seed round in the third quarter of the year as the amount is closer to the average Series A check size, which comes in at $22.8 million.

According to the company, the new funds will be used for increased marketing efforts and upgrading the development team.

In order to provide incentives to developers to build on the ecosystem, Shardeum plans to host hackathons in India and the US.

Previously, the startup announced that it aimed to raise $18 million at a $200 valuation in August.

The company is a proof-of-stake blockchain platform. It uses dynamic state-sharding technology in pursuit of efficiency gains and to scale the network. 

Sharding also further helps split blockchain infrastructure into smaller pieces. It helps increase block space for more transactions and reduces gas fees. 

According to the company’s announcement, the system has been designed to eliminate user experience issues faced by users and developers of existing and shared blockchains.

Shetty said in a statement, “the blockchain trilemma has been a difficult problem to solve, and scalability is the most significant factor, preventing wider crypto adoption, especially in emerging markets like India.”

He added, “the web3 ecosystem has been on a massive growth spree. For web3 to onboard 1 billion users in the next few years, we need a scalable L1 blockchain which ensures 1 cent fees forever while maintaining decentralization. Shardeum aims to make that happen.”

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India’s WazirX Lays Off 40% Of Workforce, Triggered by Market Hardship

WazirX, a cryptocurrency platform based in India, has laid off several employees, a move that aims to make the exchange remain financially stable amid the ongoing market downturn. Three sources with knowledge disclosed the matter on Saturday.

According to the sources, WazirX laid off between 50 to 70 employees or 40% of the exchange’s workforce of 150 on Friday. The laid-off workers were told they would be paid for 45 days, they would not be required to report for work thereafter, and their access to work was blocked immediately.

One of the sources said the exchange cut the workforce from several departments including customer support, HR, and other departments. Managers, Analysts, and Associate Managers/Team leaders were among those who faced the axe.  

Another source who lost his job stated that the entire public policy and communication team was fired. Another WazirX employee who lost his job “abruptly” on Friday narrated that the firm was never transparent with its financial position, either when it was doing well or in distress.

According to CoinGecko data, WazirX daily trading volumes have been steadily dropping from a high of 478 million on October 28, 2021, to 1.5 million on October 1, 2022. On some days, trading volumes have been lower than a million, and “this is not enough to support operations,” the sources said.

In a statement on Saturday, WazirX said: “The crypto market has been in the grip of a bear market because of the current global economic slowdown. The Indian crypto industry has had its unique problems with respect to taxes, regulations, and banking access. This has led to a dramatic fall in volumes in all Indian crypto exchanges.”

The decline in trading volumes started shortly after India’s implementation of harsh crypto tax laws in July 2022. On July 1, India’s government issued a harsh new crypto tax, imposing a 1% levy on all cryptocurrency transactions. Since then, trading on the country’s crypto exchanges has crumbled. Trading volume on the Indian exchange WazirX was down 68% since the law took effect. On other popular exchanges in the country like CoinDCX and ZebPay, trading volume was also down 83% and 16%, respectively.

In recent days, WazirX has faced a series of problems that further led to a significant decline of its trading volumes. Early last month, WazirX was in hot water after Binance claimed that it does not own any equity in Zanmai Labs’, the entity operating WazirX.

Binance issued the statement hours after India’s Enforcement Directorate (ED) had frozen WazirX’s bank accounts and raided its premises due to concerns implicating India’s exchange with money laundering issues.

As per data from CoinGecko, WazirX daily trading volumes dropped to less than 2 million after the ownership row and regulatory crackdown took place – from a high of daily trading volumes of around 5 million.

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Binance-Backed WazirX Exchange to Delist USDC, USDP & TUSD

Indian cryptocurrency trading platform WazirX has announced it will be delisting USD Coin (USDC), USDP, and TUSD in a move that is similar to its so-called parent company, Binance Exchange.


In a Monday update, WazirX said the deposit support for these tokens has already been halted, and that withdrawal support will run from now until 5 p.m, IST on September 23rd.

The exchange said the tokens will automatically be converted to Binance USD (BUSD) and the conversion will run until October 5. 

The conversion from USDC, USDP, and TUSD will be on the ratio of 1:1. While the delisting process is billed to continue until September 26, the trading platform said users will still be able to view “their USDC, USDP, and TUSD balances under the BUSD-denominated account balance when the conversion is complete.”

The delisting of the three tokens comes off as regulatory scrutiny mounts, as well as Binance exchange made a similar move in the past month. 

The move has been welcomed with dissenting views by industry stakeholders, however, veterans like Jeremy Allaire, the co-founder and Chief Executive Officier of USDC issuer, Circle have backed the exchange, noting among many things that the delisting of USDC may push the stablecoin to become the standard stablecoin rail between centralized exchanges (CEXs) and decentralized exchanges (DEXs).

With WazirX making a similar move from Binance, it is not clear at this time whether the two trading platforms have set aside their differences especially as it concerns the ownership of the Indian offshoot. 

During the probe of WazirX over fraud-related cases by the Indian Enforcement Directorate (ED), dust was raised as to the ownership status of the exchange. While there is an understanding that Binance had earlier acquired WazirX based on an announcement dating back to 2019, the trading platform’s CEO Changpeng Zhao in a spat with WazirX’s Nischal Shetty said the acquisition did not pull through.

While the ownership status is yet to be cleared, that WazirX is delisting the top stablecoins on its platform in favor of BUSD shows there is a connection between both entities.

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CoinSwitch Kuber Raided by Indian Authorities: Report

Indian crypto exchange giant CoinSwitch Kuber comes off as the next trading platform to be raided by the Enforcement Directorate (ED).


Local media outlets reported on Thursday, citing one employee from the Bangalore Cell of the ED, that at least 5 premises linked to the trading platform were raided.

According to the anonymous tip, the raid was conducted in relation to the Foreign Exchange Management Act (FEMA).

“We are looking into multiple possible contraventions under FEMA and other entities that are connected to it,” the official said. “Since we did not receive the desired cooperation, we have conducted searches on (residences) of directors, the CEO, and the official premises” of the trading platform.

The raid on digital currency trading platforms in India is no longer a piece of big news as the precedent was set earlier this month with Binance-linked trading firm, WazirX. While the freezing of over $8 million belonging to WazirX was in connection with its alleged role in facilitating money laundering activities for Chinese loan apps.

Scrutiny on digital currency trading platforms is now a major trend, considering the need for regulators to ascertain that digital currency trading platforms follow established money laundering guidelines. The exact charges on CoinSwitch Kuber are yet to be determined, and there is no certainty on whether there is a connection between the enforcement action taken against the trading platform and WazirX.

Unlike the investigation into WazirX, which caused the authorities to raid the house of one of the directors of the exchange, the source did not also confirm if the raid into CoinSwitch Kuber involved any personal director of the crypto marketplace.

Likewise, Bithumb, a South Korean exchange, is one of the trading firms that was raided consistently by the police back in 2020. The incessant crackdown on the platform forced it to offer itself up for sale, with Huobi one of the early firms, hinted to have interest in acquiring the platform at the time.

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Shardeum Seeking to Raise $20m-$30M Seed Fund at $200m Valuation

Nischal Shetty, the co-founder of Indian cryptocurrency exchange WazirX, is seeking a $20 million to $30 million funding round for his blockchain startup Shardeum at a $200 million valuation.

According to TechCrunch, investors in the round include Spartan Group, Struck Crypto, Big Brain Holdings, and Cogitent Ventures.

The financing is in the form of a private, financing is still in progress, and the specific funds raised have not been disclosed.

The public chain project Shardeum network will use sharding technology – dividing the network into multiple shards. Enables more transactions to be processed in parallel.

The network is currently undergoing testing, has an EVM-compatible mechanism and uses Proof-of-Stake consensus.

Nischal Shetty said:

“We are currently working with top VCs in an ongoing funding round. While it has not yet closed, we expect to see great support for Shardeum and our mission of making blockchain technology faster, smarter, and easier to use for everyone.”

According to people familiar with the matter, the project will start with India and emerging markets as its primary user base, who said users could process more than 100,000 transactions per second through the blockchain’s 100,000 nodes.

The company expects to launch the mainnet in October and launch more than 500 million SHM tokens.

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Binance and WazirX Founders Trade Words Over the Latter’s Ownership

The confiscation of the bank account of WazirX, one of the most renowned cryptocurrency trading platforms in India, by the Enforcement Directorate (ED) as reported earlier by Blockchain.News has opened up a more concerning question about the trading platform’s ownership.


The duo of Binance’s Chief Executive Officer, Changpeng Zhao, and WazirX’s founder, Nischal Shetty have been distancing themselves from the embattled trading platform as it seems the authorities are onto the exchange. 

The war of words started when Nischal shared a Twitter post about Binance Exchange being the owner of the trading platform and Zanmai Labs, the startup which he and his team controls the outfit that operates the Indian Rupees/crypto trading pairs on the platform based on a license from Binance. From Nischal’s exposition, the Binance exchange is the one that handles the crypto-crypto trading pairs on the WazirX platform.




Changpeng Zhao disagreed in part with Nischal, noting that though Binance Exchange acquired WazirX, the bigger exchange only controls the exchange’s Amazon Web Services (AWS) login details and provides it with wallet services. According to CZ as he is popularly known, the “WazirX founding team maintained control of the operations of the platform. We (Binance) were never give data or control of users, KYC, etc.”


The spat between both crypto leaders went on throughout the weekend as industry observers shared concerns as to the legitimacy of the claims from both veterans. In reality, the party involved in the day-to-day operations of the exchange will be most answerable to the ED in the ongoing investigations. 


While Nischal said WazirX is cooperating with the authorities to resolve the allegations bordering on the exchange’s money laundering engagement for Chinese loan apps, CZ has also reaffirmed his readiness to help the trading platform get past its woes with the authorities and put the entire situation behind.


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WazirX Faces Sanction For Abating Illegal Loan App Companies

Asian crypto exchange WazirX which has been under the probe of the Indian enforcement agency, Directorate of Enforcement has finally had its bank assets seized


Cumulatively, the frozen bank assets are worth about Rs. 64.67 crores which is approximately $8.13 million at current market value.

After several investigations, including probing the directors of Zanmai Labs Private Limited (WazirX) Nischal Shetty and Sameer Hanuman Mhatre the Enforcement Directorate (ED), has decided that WazirX is involved in a money laundering case.


The cryptocurrency exchange, WazirX is a subsidiary of Binance Holdings Limited the world’s largest crypto exchange by market capitalization. 


WazirX was accused of conniving with Loan App companies who were already under the radar for laundering customers’ funds. With assistance from WazirX, these fraudulent companies could divert the money from their laundering activities to crypto wallets. So far, the Indian crypto exchange offers this illegal service to about 16 financial technology companies.


WazirX Failed to Conduct KYC Procedures


WazirX complicated ownership structure is posing as an impediment to the case.  


Although, a show cause notice was issued under the provisions of the FEMA against the crypto platform to justify its actions. From all indications, The exchange failed to conduct an appropriate know-your-customer (KYC) procedure or any enhanced due diligence (EDD) on any of these companies. 


Also, no suspicious transaction report (STR) was submitted to inform the Financial Intelligence Unit (FIU) authorities of the skeptical activities of these Loan App companies. Interestingly, most of the transactions between WazirX and the companies were not recorded on the blockchain.


A statement from the probe reads, “While doing fund trail investigation, ED found that a large number of funds was diverted by the fintech companies to purchase crypto assets and then launder them abroad. These companies and the virtual assets are untraceable at the moment.”


Meanwhile, Wazirx has been on the radar of the Indian authorities for so many counts. It allegedly violated the Indian Foreign Exchange Management Act (FEMA). At another time, it was listed by the State Minister for Finance for the Indian government, Pankaj Chaudhary as one of the crypto firms which had successfully evaded tax.

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India Crypto Exchanges Restricts Rupee Deposits to Buy Crypto

Indian cryptocurrency exchanges CoinSwitch Kuber and WazirX have banned users from making Rupee deposits to buy cryptocurrencies, Reuters reported. - 2021-11-17T171352.077.jpg

This is a decision that stems from regulatory uncertainty. Last week the National Payments Corporation of India, the operator of the government-backed United Payments Interface (UPI), said it was unaware of crypto exchanges using its UPI which is a widely-used state-backed transfer network used for simplifying transfers between banks.

CoinSwitch Kuber enjoys 15 million users, and currently allows users to withdraw corresponding rupee funds but does not support depositing rupees on its platform.

While platform users have urged the exchange to let its users know how long it will be closed, rival exchange WazirX said it did not estimate a time limit for resolving the issue.

India’s parliament announced that it passed the Finance Bill 2022, which has introduced taxation on digital assets including cryptocurrencies, effective on April 1

According to Abhishek Malhotra, Founding Partner of TMT Law Practice

“Regulatory clarity is the need of the hour. There are currently a lot of conflicting signals on the regulatory regime, leading to lack of certainty.”

Coinbase, the largest crypto exchange in the U.S., announced Thursday that its trading services are now available to users in India. The publicly listed firm said that it is working to widen its product offerings in the country.

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Indian Crypto Taxation Leads to Daily Sign-ups Increase for Exchange Platforms

Indian crypto-asset exchange platform WazirX witnessed a 30% jump in its daily sign-ups since the country decided to impose a 30% tax on profits from cryptocurrency trading, according to co-founder Nischal Shetty. - 2022-02-18T145947.501.jpg

While rival CoinSwitch saw a daily increase of 35%, according to founder Ashish Singhal. Binance owned WazirX is the largest crypto bourse in India.

The crypto tax decision by the Indian government could be seen as a boon instead of an obstacle as crypto interest among the public has risen due to a probability that taxation has legitimized an industry that was earlier in regulatory limbo, although it had already been facing stringent backlashes from the central bank.

According to Shetty, there could be about 100 million individual investors in crypto in the next two to three years.

“Investors are seeing a lot of clarity and visibility now with taxation announced in the budget,” Shetty said. “Earlier, people were on the sidelines wondering if cryptos were allowed or not.”

Neither exchange disclosed how many customers they added in total since Feb 1, but Shetty said that on average, the new client puts about 30,000 rupees to 40,000 rupees  ($400 to $533) in their trading account. 

Following the announcement of the taxation scheme, crypto wary companies have started to show investment interests in WazirX, Shetty said. However, India’s crypto industry still lives in uncertainty as the country has not introduced legislation governing digital assets.

Meanwhile, the Reserve Bank of India (RBI) or central bank has not shown any signs of toning down its criticism against the use of digital assets.

Earlier in February, RBI Governor Shaktikanta Das showed distaste towards cryptocurrencies saying that they are a threat to financial stability and comparing them unfavourably to the 17th-century Dutch tulip mania. 

RBI Deputy Governor T. Rabi Sankar echoed Das’ sentiments saying that India should ban cryptocurrencies as they are related to Ponzi schemes or worse and they pose a threat to financial and macroeconomic stability, Blockchain.News reported on February 15, 2022.

“We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and maybe even be worse,” T. Rabi Sankar said in a speech.

Blockchain.News also reported that India’s Finance Minister Nirmala Sitharaman came out guns blazing to clarify that cryptocurrency taxation is a “sovereign right” and “corrective action”.

Sitharaman clearly noted that while the “profit emanating from transactions associated to cryptocurrency has been taxed, nothing has been done, at the moment, to legalise, ban or de-legalise it”.

Sitharaman also clarified doubts about the future of cryptocurrency in the country, stating that if there were any final decisions on prohibiting digital currencies, it would only come after due consultation from all stakeholders.

Sitharaman, however, also gave hope to crypto exchanges and investors who have been arguing for the regulation of cryptocurrencies as an asset.

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Why did WazirX token WRX jump 30% after India announced its big crypto tax?

WazirX exchange’s native token WRX benefited the most from India’s latest u-turn on crypto this week.

WRX price jumps on India tax news

WRX price surged nearly 30% to over $1, hitting a three-week high after the Indian government announced a new tax regime for the regional crypto sector, reversing entirely from its earlier strict stance that even contemplated an outright ban on the emerging industry.

In her budget speech on Tuesday, Finance Minister Nirmala Sitharaman said that they plan to tax the income from trading cryptocurrencies at 30%, which while among the highest rates in the world, also means that digital assets are officially recognized in India.

WRX price jumped after Sitharaman’s speech, probably due to its association with an India-based crypto exchange, WazirX. The WRX token serves as a utility token on the platform, benefitting users with trading fee discounts and access to new token airdrops. 

Another 250% rally ahead?

Utility tokens typically derive their value from speculations that their adoption would grow in tandem with the growth of their platform, one that is no longer in regulatory limbo. 

Javon Marks, an independent market analyst, predicted further price booms in the WRX market, noting that the WazirX token could climb toward $3.80 from its current $1-levels. At the core of his bullish analogy was a technical setup, as shown in the attached chart.

WRX/USD three-day price chart. Source: Javon Marks, TradingView

In detail, WRX’s ongoing price boom had its price break above a multi-month downward sloping resistance trendline. Marks noted that the breakout “technically” positions the WazirX token to rise by another 252% in the coming sessions to its April 2021 resistance targets.

“As long as WazirX holds this break, this target will remain pushable,” the analyst tweeted Wednesday.

The statement also surfaced as the crypto market, on the whole, remained in a state of turmoil after a depressive January performance. WRX itself dropped more than 30% into the month, mirroring similar moves across the top-ranking crypto-assets, including Bitcoin (BTC), which tanked nearly 18% in the same period.

The interim pullback scenario

WazirX’s day-to-day correlation with broader crypto market trends, however, puts WRX at risk of bearish continuation. It is primarily because the catalysts that played a key role in pushing the digital assets lower in January 2022 — the Federal Reserve’s hawkish turn — remain intact.

Related: Bitcoin ‘gives back gains’ after Fed comments ‘add downside risks’ to crypto markets

Additionally, the WRX price faces a technical resistance confluence that may limit its recovery bias in the sessions ahead. Specifically, a combination of price ceilings, including a descending triangle’s upper trendline, have already been capping the WazirX token’s upside attempts.

WRX/USD daily price chart featuring descending triangle setup. Source: TradingView

Other resistance levels include a 50-day exponential moving average (50-day EMA; the red wave) and a 200-day EMA (the blue wave). A pullback upon testing them risks dropping the WRX price to the descending triangle’s lower trendline near $0.75.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.