WazirX, a major Indian cryptocurrency exchange, has unveiled a “socialized loss strategy” after a significant hack resulting in a $235 million loss. This approach aims to distribute the impact of the hack equitably among users.
Points
- WazirX hack resulted in a $235 million loss.
- Implemented a “socialized loss strategy” to distribute the impact.
- Users can choose between two recovery options.
- Users must respond by August 3, 2024.
Indian crypto exchange WazirX has unveiled a plan to mitigate the effects of a recent hack that resulted in the loss of approximately $235 million. The breach, which affected 45% of user funds, has led the exchange to introduce what it’s calling a “socialized loss strategy” to ensure what it calls a more equitable resolution for its users and maintain platform stability.
The exchange says its strategy aims to distribute losses fairly among all users, preventing disproportionate impacts on any single group.
According to correspondence that WazirX sent to affected users — a copy of which was shared with crypto.news — the exchange presented a poll with two options to recover stolen funds. “Option A” lets users access 55% of their funds “for trading and deposits,” without withdrawal rights, but gives them priority in potential recovery proceeds. “Option B” lets users withdraw 55% of their assets “in a staggered manner,” albeit with lower priority in the recovery queue. In both cases, WazirX states that the remaining 45% of user assets will remain locked on the exchange as “USDT-equivalent tokens,” which would only be returned to users if the firm succeeds in recovering the stolen funds.
Recovery options that WazirX sent to affected users | Source: crypto.news
In their post, the exchange requested that affected users vote for their preferred option by Aug. 3, 2024.
According to poll results shared with the crypto.news team, at the time of writing, approximately 62% of the impacted users have selected Option B, which lets them make withdrawals. The other 38% have decided against this, choosing instead to forego immediate withdrawals in favor of securing first priority for any potential recovery proceeds.
Affected users vote on recovery options from WazirX | Source: crypto.news
Explanation
- WazirX has introduced a “socialized loss strategy” to distribute the impact of the hack equitably among all users.
- Users can choose between two options for managing their assets, with different benefits and conditions.
- The strategy aims to prevent any single group from bearing an excessive burden and facilitate a quicker recovery.
- Users need to respond by August 3, 2024, to select their preferred option.