WazirX was hacked recently and lost $230 million because of a security issue. This has scared the crypto world in India and other places. The big hack on July 18, 2024, caused about 45% of the money people had in the company to be lost. This has caused problems for both WazirX and the people who use it.
Also Read: India’s Largest Cryptocurrency Exchange Hacked For $235 Million
WazirX’s Controversial Recovery Strategy Faces Backlash
The Hack and Its Immediate Aftermath
Hackers attacked WazirX by finding weak spots in one of its special wallets. This led to the stealing of different types of digital money, with lots of popular ones taken from people’s accounts.
The Lookonchain analysis shows that the stolen assets included big amounts of SHIB, ETH, MATIC, and other tokens. The total value of the theft was nearly $230 million, marking one of the largest hacks in the history of Indian cryptocurrency exchanges.
The Proposed “Socialized Loss” Strategy
WazirX suggested a plan that some people didn’t like. The plan was to share the loss from the hack among all users. The company asked its customers to vote on two ways to get their money back.
Criticism from Customers and Industry Leaders
The plan WazirX suggested made customers and people in the industry very upset. Many thought it was not fair to make users pay for WazirX’s mistake in security.
Arjun Vijay, co-founder of Giottus, criticized the poll, suggesting it was designed to force customers into a choice that mainly benefited WazirX.
Sumit Gupta, who started CoinDCX, said the same thing. He said that WazirX’s way of dealing with the problem isn’t putting the community first and could hurt others in the crypto world.
Also Read: Crypto Chaos: WazirX Hack Meets Putin’s Regulation Warning
Seeking Help from Binance
In a surprising twist, WazirX reportedly asked Binance, a company it used to work with, for help to pay back customers who lost money. This happened while the two companies were having a legal fight.
Binance allegedly controls WazirX’s revenue and WRX tokens, making it difficult for the Indian exchange to use its funds for repayment.
Regulatory and Legal Implications
The hack made India’s Enforcement Directorate (ED) pay attention.
Reports suggest that the ED had put nearly $1.1 million in seized crypto assets into a WazirX wallet account months before the hack, raising questions about the exchange’s security measures and relationship with authorities.
Also Read: Cryptocurrency: You Can Earn $23 Million If You Catch WazirX Hackers
User Concerns and Industry Impact
The event has made people nervous about their money. They’re not sure if WazirX’s plan to fix things is legal or fair.
Everyone in India’s crypto business is watching what happens next because it could change how much people trust the industry and how it’s controlled.
In the end, the WazirX hack showed the problems with crypto exchanges and the hard task of fixing things after big thefts.