WazirX unveils recovery plan after $230 mn cyberattack, seeks user vote

WazirX, the crypto exchange platform that lost $230 million to a cyberattack, is rolling out a fund recovery plan based on a user poll the platform will conduct by August 3. 

In a first by an Indian crypto exchange, WazirX will socialise the loss and distribute its impact across all the users on the platform. 

"We are implementing a fair and transparent socialised loss strategy to distribute the impact across all users equitably. In similar situations, users have often faced years of uncertainty and limited access to funds. Our 55/45 approach offers a faster, more flexible solution," the company said in a blog.

 

The crypto firm said 55 per cent of user’s crypto assets on the platform will be made available for trading and/or withdrawals. So if a user has not been impacted by the cyberattack, even then their portfolio will get access to only 55 per cent of their asset.

"Users with 100 per cent of their tokens in the ‘not stolen’ category will receive 55 per cent of those tokens back. The remaining 45 per cent will be converted to USDT-equivalent tokens and locked. This is part of our fair and transparent socialised loss strategy to distribute the impact equitably," the company said.

WazirX will convert the remaining 45 per cent of the user's assets to tether-equivalent tokens and lock them. 

For users who lost their crypto investment portfolio, the company will create an unlocked portion of 55 per cent of the user's investment by deriving the value from assets available on the platform. 

WazirX said it will use a combination of existing tokens available on the platform to create a crypto portfolio, making up 55 per cent of the lost value, for users who have lost between 45 per cent and 99.9 per cent of their tokens. 

The time required to unlock the locked tokens on the platform is undefined. 

“Unlocking of locked tokens will be subject to ongoing recovery efforts. This includes tracing and recovering stolen assets, collaborating with partners to cover the deficit, and exploring compensation methods, including potential airdrops,” the firm said. 

Meanwhile, the firm said users’ funds in Indian rupee are not affected, and these users do not register a vote as part of the recovery plan.

The announcement of the recovery plans comes days after the initial security breach was detected on the platform. 

WazirX has since temporarily paused trading and withdrawals for users on its platform. 

In a blog published last week, the company’s preliminary investigation found no evidence that its signer machines were compromised, while shifting the blame to its wallet service provider Liminal. 

–WazirX requests user vote by August 3 on fund recovery plan

–Firm will unlock 55 per cent of a user's crypto value, converting and locking the rest

–Calls this a ‘socialised loss strategy' 

–Has temporarily paused crypto trading/withdrawals on platform since $230 mn breach