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WazirX Unveils Recovery Plan After $230M Cyber Attack, Seeks User Vote | Market News
WazirX will socialize the loss and distribute its impact among all users of the platform
Representative imageAjinkya Kawale Mumbai
WazirX, the cryptocurrency exchange that lost $230 million in a cyberattack, is launching a fund-recovery plan based on a user survey the platform will conduct by August 3.
For the first time in an Indian cryptocurrency exchange, WazirX will socialize the loss and distribute its impact across all users of the platform.
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“We are implementing a fair and transparent socialized loss strategy to equally distribute the impact across all users. In similar situations, users have often faced years of uncertainty and limited access to funds. Our 55/45 approach offers a faster and more flexible solution,” the company said in a blog post.
The cryptocurrency firm said that 55 percent of users’ cryptocurrencies on the platform will be made available for trading and/or withdrawals. So, if a user was not affected by the hack, even then their wallet will only have access to 55 percent of their assets.
“Users with 100 percent of their tokens in the ‘not stolen’ category will receive 55 percent of those tokens back. The remaining 45 percent will be converted into USDT-equivalent tokens and locked. This is part of our fair and transparent socialized loss strategy to fairly distribute the impact,” the company said.
WazirX will convert the remaining 45 percent of users’ assets into Tether-equivalent tokens and lock them up.
For users who have lost their entire cryptocurrency investment portfolio, the company will create an unlocked portion equal to 55 percent of the user’s investment, deriving value from the assets available on the platform.
WazirX said it will use a combination of existing tokens available on the platform to create a cryptocurrency wallet, which will represent 55 percent of the lost value, for users who have lost between 45 and 99.9 percent of their tokens.
The time required to unlock tokens locked on the platform is not defined.
“The unlocking of locked tokens will be subject to ongoing recovery efforts. This includes tracing and recovering stolen assets, working with partners to cover the deficit, and exploring compensation methods, including potential airdrops,” the company said in its blog.
Meanwhile, the company said that users’ funds in Indian rupees (INR) are not affected and that these users will not register a vote as part of the recovery plan.
The announcement of the recovery plans comes just days after the first security breach was detected on the platform.
WazirX has since temporarily suspended trading and withdrawals for users on its platform.
In a blog post last week, the company’s preliminary investigation found no evidence that its e-signature devices were compromised, instead shifting the blame to its e-wallet provider Liminal.
–WazirX Requests User Vote by August 3 on Fund Recovery Plan
– The company will unlock 55 percent of a user’s crypto value, converting and locking the rest
–He calls it a “socialized loss strategy”
– Temporarily suspended cryptocurrency trading/withdrawals on the platform after the $230 million breach