WazirX Cyberattack: A Look at the Recovery Plan
Indian cryptocurrency exchange WazirX has been hit hard by a recent cyberattack, with user losses exceeding $230 million. In a bid to recover, WazirX has announced a comprehensive plan that involves a socialized loss strategy, aiming to distribute the financial impact equitably across its user base. The plan, outlined in WazirX’s official notice, involves a 55/45 approach: 55% of users’ crypto assets will be accessible for trading or withdrawal, while the remaining 45% will be converted to USDT-equivalent tokens and locked.
The 55/45 Approach: A Balanced Solution?
WazirX argues that this method offers a faster, more flexible solution compared to traditional proceedings, allowing immediate access to a significant portion of assets while maintaining the possibility of further recovery. The exchange’s co-founder, Nischal Shetty, explained on Twitter, “The fastest way to open the platform again for operations is to socialize the loss across the crypto portfolios.” The exchange has stated that INR wallet balances will not be impacted, and this partial lock is for crypto portfolio balances only.
Key Points for Users:
- Distribution of Funds: 55% of user crypto assets will be available for trading or withdrawal, while 45% will be converted to USDT-equivalent tokens and locked.
- Balanced Portfolio: The 55% accessible portion will be balanced using a basket of unaffected crypto assets available on the platform.
- Recovery Efforts: WazirX is actively working to recover stolen funds, exploring options like airdrops and other emerging ideas.
- Portfolio Valuation: The value of the unlocked portfolio (55%) will be calculated based on average prices from CoinMarketCap and select global exchanges as of July 21, 2024, 8:30 PM IST.
- Resumption of Operations: Operations will resume shortly after a user poll, which will help guide the final decision-making process.
Impact on Different Holdings:
The 55% unlocking and 45% locking will apply proportionally to each crypto in a user’s portfolio. For portfolios with entirely stolen tokens, 55% will be replaced with other tokens of equivalent value. INR wallet balances will not be affected, and users with only INR holdings do not need to participate in the poll. For mixed portfolios of INR and crypto, INR funds will remain fully accessible, while the 55/45 approach will apply to the crypto holdings.
The recent cyberattack on WazirX has posed significant challenges for the company and its users, but the exchange is committed to addressing these issues with transparency and fairness. User input and support are crucial as WazirX navigates this period and works towards restoring full functionality.
