Indian cryptocurrency exchange Wazirx is implementing a socialized loss strategy to distribute the impact of the recent $230 million cyberattack among all its users.
The exchange stated that 55% of users’ crypto assets will be accessible, while the remaining 45% will be converted to USDT-equivalent tokens and locked.
“The fastest way to open the platform again for operations is to socialize the loss across the crypto portfolios,” said Wazirx co-founder Nischal Shetty.
Wazirx Socializes Loss From $230M Cyberattack Across All Users
Indian cryptocurrency exchange Wazirx updated users on Saturday regarding its efforts to restore operations and enable access to funds following a cyberattack that resulted in losses exceeding $230 million, which is about 45% of user funds.
The exchange’s website details how it will manage funds post-attack, outlining steps and options for users.
“We are implementing a fair and transparent socialized loss strategy to distribute the impact across all users equitably … Our 55/45 approach offers a faster, more flexible solution,” Wazirx explained, adding:
55% of user crypto assets will be made available for trading and/or withdrawals (depending upon the option that you select), while the remaining 45% will be converted to USDT-equivalent tokens and locked.
Wazirx noted that in similar situations, users often face years of uncertainty and limited access to funds.
The socialized loss strategy, however, allows immediate access to a significant portion of assets while maintaining the potential for further recovery for those who opt to wait.
The value of unlocked assets will be based on average prices from Coinmarketcap and selected global exchanges as of July 21, 2024, when trading halted on Wazirx.
Registered users will receive an email with instructions and a link to select their preferred option. Choices must be submitted by Aug. 3, with platform operations expected to resume shortly after the poll concludes.
Nischal Shetty, co-founder of Wazirx, stated on social media platform X Saturday: “The fastest way to open the platform again for operations is to socialize the loss across the crypto portfolios.”
He stressed that INR wallet balances will not be impacted, and the strategy involves a partial lock of crypto portfolio balances only.
Shetty emphasized that this socialized loss strategy is the first phase of the exchange’s recovery efforts to ensure part of the crypto portfolio is accessible to everyone.
He clarified: “This is not the end. This is the start of phase 2 where we work on recovery.”
He elaborated:
“Our recovery efforts will include working on recovery of stolen assets, finding partners and external help, airdrops/new token use cases etc. We’re also figuring how to help fill this with future profits of the exchange if we are able to grow the business.”
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