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Indian crypto exchange WazirX announces recovery plan for users after $230 million hack

Indian crypto exchange WazirX announces recovery plan for users after $230 million hack

WazirX, India's largest cryptocurrency exchange, has announced a plan to distribute the $230 million loss from a recent hack among its users in a fair and transparent manner.

The exchange, which lost nearly half of its total reserves in the attack, will rebalance customer portfolios, returning 55% of their holdings while locking the remaining 45% in USDT-equivalent tokens. This approach will impact even users whose assets were not directly stolen.

WazirX is offering two recovery options: Option A prioritizes recovery efforts but restricts withdrawals, while Option B allows trading and withdrawals but places users at a lower priority for recovery.

The exchange's founder, Nishal Shetty, warned that recovery could take years and might not fully restore losses, as the company did not insure customer funds due to a lack of viable options.

Critics argue that WazirX's actions exceed typical exchange responsibilities, essentially redistributing assets among users. Customers have questioned why the company is not using its profit reserves to mitigate losses.

To recover the stolen funds, WazirX has launched a $23 million bounty program, offering a 10% reward to the hacker for returning the assets. The exchange is also offering up to $10,000 in USDT to anyone who can provide actionable intelligence leading to the freezing of the stolen assets.

The hack, which targeted WazirX's multi-signature Ethereum wallet, has raised serious concerns about the security of decentralized finance platforms. It is considered the biggest crypto heist in India and one of the largest in the world.

The incident has sent shockwaves through India's cryptocurrency ecosystem, with users expressing concerns about the ease with which fraudsters can manipulate exchanges. It underscores the need for robust security measures and vigilant monitoring in the crypto industry.

Published July 28, 2024 by GamblingTalk