Indian cryptocurrency exchange WazirX is facing a backlash. announce Plan for a “socialized loss strategy” on Saturday, July 18th Security Breach This resulted in a loss of about $230 million, or about 45 percent of the assets.
On Saturday post According to X, WazirX co-founder Nischal Shetty outlined two paths the exchange could take following the breach:
- “Legal proceedings: It takes years and the result is the distribution of the remaining assets. Legal fees pile up and the matter drags on for years. By then, no one gets anything. The result is similar to socializing the loss structure.
- “Socialize the loss and rebuild. First, socialize the loss. Then rebuild so that you can grow the business, distribute the profits, find more solutions, such as new buyers, new initiatives, etc., because the business will be running. This way, you can recover faster.”
WazirX also allows customers to initiate voting. According to reports You are asked to vote on two options: access to 55% of the non-withdrawable funds but get priority for potential recovery funds, or access to 55% of the withdrawable funds but get secondary priority for potential funds. The remaining 45% is converted to USDT and locked.
After considerable backlash, both WazirX and Shetty In a post about X on Monday, the company said the poll was “non-binding” and was intended to gauge users’ opinions on how best to proceed.
“Our team is currently reviewing all of your feedback to devise a plan that truly aligns with the best interests of the community. We aim to integrate your collective voice and develop a plan that ensures fair and effective outcomes.” Exchange wrote.
Shetty then said Video to X The poll on Monday reiterated that while non-binding, it advocated for the option of socializing losses, which would allow exchanges to reopen and continue operating for users, while also exploring other options to recover lost tokens and compensate affected users.
However, many have criticized this approach as punishing platform users for infringement. CoinDCX co-founder Sumit Gupta said the first contribution to losses should come from the company.
“It is completely nonsense to expect customers to absorb 45% of the loss themselves. The polling option is also designed to protect the business first, not the customer,” Gupta added.
Hackers stole over $100 million from Shiba Inu, 20 million Matic tokens ($11 million), 640 billion Pepe tokens ($7.5 million), 5.7 million USDT, and 135 million Gala ($3.5 million). As a result, the exchange suspended trading. Other reports suggest that the North Korean state-sponsored Lazarus Group may have been behind the hack, and that it is unlikely that the funds will be recovered.
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