The recent hack on India’s leading crypto exchange the WazirX Safe Multisig wallet on Ethereum which led to the loss of over $230 million sent shockwaves, not only in India but the broader cryptocurrency ecosystem. The exchange has however unveiled a fund recovery plan for users.
Transparent and Fair Fund Recovery Strategy
In an X post, WazirX says it remains committed to addressing the fallout of the incident transparently and fairly to all users. According to the exchange, their plan involves the distribution of the loss in a socialized loss strategy for the fund recovery.
The implication means the loss will be evenly spread among all WazirX users in a bid to minimize the impact and also mitigate possible challenges to the exchange’s stability. The exchange had halted withdrawals immediately after the malicious actors hacked through their security.
As per the plan, WazirX does not want a situation where only a small fraction of users bear the financial burden. Hence, it has resolved to a 55/45 ratio approach which means that the exchange will unlock 55% of users’ assets and keep the remaining 45% locked in Tether equivalent tokens.
The WazirX Asset Management Options for Users
Notably, WazirX offers two options in asset management. Both options have their benefits, as well as terms and conditions which users can access on their website. Meanwhile, registered users should anticipate detailed information and directives through their emails. Users need to respond and select their preferred options on or before 7:00 a.m., August 3, 2024, local time.
Analysts consider this a way to stay afloat, particularly with no immediate respite from India’s crypto taxation plans despite industry moves for reforms. However, the plan by the exchange has generated strong reactions from holders, some of whom disagree with the distribution proposed.
Broader Implications and Industry Reactions
A user with the name ‘Seeking Connection Summer of Shibarium’ (@MilanAr97154294) maintains that WazirX ought to bear the liability. “It was your responsibility to keep our funds safe since it’s your mistake, you need to pay back our hard earned money. Raise funds, sell your properties, give our money back to us,” he posted. Another user wondered about the justification for holders to make up for the loss.
Despite these concerns, WazirX says it will create a diversified portfolio with a basket of crypto assets for the unlocked 55% of users’ assets to guarantee fair distribution. This unveiled plan comes a few days after it had announced a bounty program to recover the stolen funds.
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