WazirX, the leading cryptocurrency exchange in India has revealed its plan to spread the $230 million loss it incurred following a hack on the platform amongst its users in an equitable manner.
The WazirX team after weeks of putting up a bounty program in a bid to recover the stolen funds have finally announced their plan to deal with the loss and compensate affected users.
Wazir X shared its latest plan on its X page stating their commitment to handling the issue fairly and transparently
“In response to the recent cyber-attack that led to the theft of $230 million (45% of user funds), we are committed to handling the situation fairly and transparently. We are implementing a socialized loss strategy to distribute the impact equitably among all users. To manage the remaining assets, we offer two options, each with specific benefits and conditions. Users can find details in the WazirX app or on our website.” Wazir X tweeted
WazirX team in its blog post explained the percentage for the distribution of funds and what users can expect to be getting after the exercise.
“55% of user crypto assets will be made available for trading and/or withdrawals (depending upon the option that you select), while the remaining 45% will be converted to USDT-equivalent tokens and locked.” WazirX team added
WazirX founder Nishal Shetty threw more light on the planned approach by the exchange to handle the $230 million loss.
He explained that the 55/45 approach offers a faster, more flexible solution. He added that the approach balances quick access for some with priority potential recovery for others, aiming to resolve the situation more efficiently than traditional proceedings
The approach was criticized by Nikhil Pahwa a policy analyst who argued that the approach was improper and was bordering on the abuse of access and trust ceded to WazirX by its users.
“As an exchange or custodian, they have no right to do this. Imagine the NSE doing this to stock market investors. Users can no longer trust WazirX, and should withdraw whatever they have left there as soon as they can.” Nikhil tweeted.
WazirX increased its bounty for white hat hackers who can help in retrieving the funds to $23 million or 10% of the stolen funds.
The security breach occurred on the exchange’s Multi Sig wallet which the WazirX team has described as a force majeure event.
What to Know
- On July 18, WazirX were alerted by Blockchain security firm Cyvers on a potential hack on their platform which led to the loss of over $230 million in crypto asset. The hack remains till this day the biggest crypto hack in India and the second biggest in the crypto industry in 2024.
- The hacker converted most of the stolen crypto assets to Ethereum before attempting to offload the assets. Shiba Inu tokens were one of the heaviest loots of the heist and the price of Shiba was slightly affected by that.
