WazirX, India’s largest cryptocurrency exchange, recently faced a cyber attack resulting in the theft of over $230 million worth of digital assets. In response, WazirX introduced a “socialized loss strategy” to distribute the losses among users and maintain platform stability. This move has faced fierce backlash from users and industry experts who believe that WazirX is prioritizing its own survival over user security.
The controversial recovery plan offers two options for users to recover their stolen funds. Option A allows users to access 55% of their funds for trading and deposits but restricts withdrawals. Option B permits users to withdraw 55% of their assets in a staggered manner with a lower priority in the recovery queue. Regardless of the option chosen, 45% of user assets will remain locked on the exchange as USDT-equivalent tokens until the stolen funds are recovered.
The public response to WazirX’s recovery plan has been overwhelmingly negative, with many users feeling betrayed and skeptical about the exchange’s intentions. Industry experts, including Sumit Gupta from CoinDCX and Brian Kuttikat from KoinBX, have criticized WazirX for socializing losses and not taking full responsibility for the incident. Calls for justice and transparency have also emerged, with users demanding criminal proceedings and a CBI inquiry to determine the nature of the attack.
Amidst the backlash, Nischal Shetty, the head of WazirX, clarified that the poll presented to users is not legally binding and is a preliminary step to understand opinions. However, the lack of transparency and support from both WazirX and the government has left investors feeling abandoned and betrayed. India’s regulatory silence on cryptocurrency matters, combined with high taxes and strict regulations, creates a precarious environment for investors.
As India continues to lead in crypto adoption, it is crucial for the government to engage more actively and constructively with the industry. Ignoring the issue is not a viable long-term strategy. The lack of support from both WazirX and the government will only further erode trust within the Indian crypto community. It is time for all stakeholders to prioritize the security and well-being of users to ensure the sustainable growth of the industry.
