TLDR
- On July 18, 2024, WazirX experienced a security breach that led to a $230 million loss, affecting 45% of their holdings.
- To recuperate from the hack, the exchange suggested a 'socialized loss strategy' and polled users for preferred recovery methods.
- The proposal sparked significant disapproval from both customers and industry professionals.
- WazirX clarified that the poll aimed to understand user preferences and held no legal weight.
- Concerns arise regarding the fairness of WazirX’s recovery plan and its implications for India's crypto sector.
WazirX, an Indian crypto exchange, comes under scrutiny for its response to a breach costing $230 million of user assets.
The hack, which occurred on July 18, 2024, The hack drained 45% of WazirX's assets, including popular coins like Shiba Inu, Matic, Pepe, USDT, and Gala.
In reaction, WazirX proposed a 'socialized loss strategy,' initiating a poll on July 27 for fund recovery preferences.
- Option one allowed for 55% fund access minus withdrawals, with priority on potential recovery proceeds.
- The second choice permitted 55% fund access with withdrawal capacity but lower recovery priority.
This plan drew criticism for potentially punishing users for WazirX's mishap, with industry figures disputing its fairness.
Sumit Gupta, CoinDCX's co-founder, insisted that companies must first shoulder loss burdens.
He criticized WazirX's approach for not prioritizing community welfare, potentially harming India's crypto ecosystem.
Arjun Vijay from Giottus accused the poll of manipulating customer choice in the exchange's favor.
Unocoin's co-founder, Dr. Sathvik Vishwanath, warned of the negative impact on the entire Indian crypto industry.
1. This poll serves as an initial step to collect your feedback.
2. Participation in the poll doesn’t legally bind either users or WazirX.This is a major… https://t.co/tcdDjWzIYI
3. A feedback form will soon be launched for broader idea collection. July 29, 2024
4. We are examining further steps based on accumulated feedback.
— Nischal (Shardeum) 🔼 (@NischalShetty)
Frustrated clients question the legality and fairness of the strategy, calling it 'socialized loss, privatized profits.'
Amidst growing criticism, WazirX's co-founder Nischal Shetty reassures that the poll is just for gathering user opinions.
Shetty defends the loss strategy, claiming it aids reopening and seeks other refund and recovery methods.
