WazirX announces a $230 million recovery plan following a cyberattack, implementing a 55⁄45 socialized loss strategy to manage the impact on users.
Points
- WazirX adopts a 55⁄45 socialized loss strategy.
- Users can access 55% of their assets immediately.
- Users must choose their asset management option by August 3, 2024.
WazirX, one of India’s leading cryptocurrency exchanges, has announced a comprehensive recovery plan following a $230 million cyberattack. This plan, known as the “socialized loss strategy,” aims to distribute the impact of the breach equitably among all affected users.
Equitable Distribution Strategy
The hack affected 45% of user funds, prompting WazirX to adopt a 55⁄45 approach to fund recovery. This method allows users immediate access to 55% of their assets, while the remaining 45% is locked in Tether （USDT）
equivalent tokens. This strategy ensures a more predictable resolution compared to traditional methods, providing users with some liquidity while managing the recovery of the remaining funds.
User Options and Instructions
WazirX is offering users two distinct options for managing their remaining assets, each with specific benefits and conditions. Detailed instructions will be shared with users via email and through the WazirX app or website. Users have until August 3, 2024, at 7:00 am IST to respond and select their preferred asset management option. This clear communication aims to help users make informed decisions about managing their assets post-hack.
Calculating Asset Value and Resuming Operations
The value of the unlocked portfolio will be calculated based on average prices from CoinMarketCap and select global exchanges as of July 21, 2024, at 8:30 pm IST. WazirX has announced that operations will resume shortly after users complete the poll to select their preferred asset management option. The resumption of operations will allow users to access and manage their assets effectively.
Broader Implications and Industry Reactions
The WazirX hack and subsequent recovery plan have broader implications for the cryptocurrency industry. It highlights the importance of robust security measures and transparent recovery strategies in maintaining user trust. The community’s reactions have been mixed, with some users expressing frustration over the financial loss, while others appreciate the exchange’s efforts to manage the situation fairly.
Explanation
- WazirX’s $230 million hack led to a comprehensive recovery plan, involving a 55⁄45 socialized loss strategy.
- Users must choose their asset management options by August 3, 2024.
- The recovery plan aims to distribute the impact of the hack equitably among all users.
- The resumption of operations will allow users to access and manage their assets effectively.
- The hack highlights the need for robust security measures and transparent recovery strategies in the cryptocurrency industry.