experienced a cybersecurity attack on July 18. This resulted in a loss of $230 million. This security breach is equivalent to 45% of the user's funds.
The plan they try to implement to recover from this unexpected trying to implement to recover from this unexpected event is controversial among users. WazirX plans to implement a “fair and transparent socialized loss strategy”. This will make the recovery process much faster while the company still runs its activity.
The Cybersecurity breach resulted in the loss of over 200 cryptocurrency tokens like Ethereum, Bitcoin, and Shiba Inu (SHIB). The company temporarily paused all INR (Indian Rupee) and cryptocurrency transactions due to the events on July 18.
The recovery strategy consists of rebalancing the portfolios the users have through the company. The company will return only 55% of the user’s holdings while the remaining 45% is blocked and can’t be used. As mentioned by the strategy name, this decision is a “socialized decision”. This means that it will affect the other users, the users that didn’t suffer any cryptocurrency loss in the security breach.
This approach is creating controversy online. Leading policy voice and editor at MediaNama –Nikhil Pahwa posted on X –formerly Twitter his concern. “WazirX is actually exercising control over crypto assets that it holds for users. This means that it is not just acting as an interchange & a depositary, but actually reaching into user wallets and taking out crypto and giving it to others. It can’t claim to be an exchange only,”
The founder of WazirX –Nischal Shetty also posted on X. He explained the reason behind the approach of the cryptocurrency trading company. He ended the post with the words “Only together, we can do this.”. This is a way of saying that they hear the people’s concerns after the cybersecurity breach and they ask for help and patience.
The WazirX users have two options moving forward. The first option, option A is the one where users trade and hold their cryptocurrency tokens, without withdrawing their assets. This option makes them a priority in the recovery efforts.
The second option, option B allows WazirX users to use their tokens as they wish, even withdrawing them. However, this makes them a low priority in the recovery efforts of the company.
The WazirX users can switch from Option B to Option A any time they want, before any trades or withdrawals.
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