WazirX to Share $230 Million Hack Losses with Users
In a bold move, Indian cryptocurrency exchange WazirX has decided to spread a $230 million loss across its user base after a major security breach.
The breach, discovered by blockchain security firm Cyvers on July 18, compromised nearly half of WazirX’s reserves, making it the largest crypto theft in India’s history.
Following the hack, which involved suspicious activity in the exchange’s Safe Multisig wallet on the Ethereum network, WazirX suspended all operations, reported the incident to the authorities, and alerted the Financial Intelligence Unit (FIU) and CERT-In.
To manage the fallout, WazirX has proposed a “socialized loss strategy” that will return 55% of users’ holdings while locking the remaining 45% in USDT-equivalent tokens. This measure affects all users, even those whose assets were not directly impacted. Customers can choose between two recovery options: trading with restricted withdrawals or unrestricted trading with lower recovery priority.
READ MORE: Donald Trump Pledges to Make U.S. Global Leader in Cryptocurrency
Nishal Shetty, the founder of WazirX, stated that the exchange had no insurance for customer funds due to a lack of viable options and warned that the recovery process could be lengthy and incomplete. Critics, including policy expert Nikhil Pahwa, have argued that WazirX’s approach effectively redistributes users’ assets and oversteps the typical role of an exchange.
In response to the breach, WazirX has also announced a bounty program, offering $23 million to the hacker for the return of the stolen funds and up to $10,000 for information leading to the recovery of the assets. Initially, the bounty was set at 5% of the stolen amount, but on-chain investigator ZachXBT suggested increasing it, especially given the potential involvement of the notorious Lazarus Group from North Korea.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
