Indian cryptocurrency exchange WazirX has set in motion a plan to address the aftermath of a cyberattack that resulted in losses of over $230 million. The exchange announced a socialized loss strategy to distribute the impact across its user base, aiming to restore operations and provide access to user funds.
The approach adopted by WazirX involves making 55% of users’ crypto assets available for trading or withdrawal, while the remaining 45% will be converted into USDT-equivalent tokens and locked. This move is seen as a more agile and proactive response compared to traditional methods, offering users immediate access to a significant portion of their assets while leaving room for further recovery efforts.
Co-founder Nischal Shetty took to Twitter to emphasize the rationale behind the socialized loss strategy, highlighting the importance of reopening the platform for operations swiftly. He assured users that the current measures are just the beginning of the recovery phase, which will involve initiatives such as asset tracing, partnerships for external support, airdrops, new token applications, and potential utilization of future profits to mitigate the losses.
In addition to outlining the loss distribution plan, WazirX has provided users with options for managing their remaining assets. Users can choose between managing the unlocked portion of their portfolio, participating in recovery efforts, and deciding on the final course of action for their assets. The exchange has specified that the 55% accessible part of the portfolio will be balanced using a mix of unaffected crypto assets available on the platform.
To facilitate user engagement in the decision-making process, WazirX has launched a poll through which users can indicate their preferences regarding the handling of their assets. The poll outcome, along with ongoing investigations, liquidity assessments, and evolving circumstances, will guide the final resolution. Users have until August 3, 2024, to respond to the poll, with the understanding that their input will influence the decision-making process.
The impact of the cyberattack on WazirX extends to different types of crypto holdings and INR balances. The exchange has assured users that INR wallet balances will not be impacted, and those with solely INR holdings do not need to participate in the poll. For mixed portfolios of crypto and INR, the 55/45 approach will be applied to crypto holdings, while INR funds will remain fully accessible.
Despite the challenges posed by the cyberattack, WazirX is committed to addressing the situation transparently and fairly. The exchange acknowledges the support and cooperation of its users as it navigates through the recovery phase and aims to restore full functionality in the near future.
In conclusion, the cyberattack on WazirX has prompted the exchange to take proactive measures to manage the impact effectively and ensure the security of user funds. By involving users in the decision-making process and outlining a comprehensive recovery plan, WazirX aims to regain user trust and resume operations with minimal disruption.