WazirX faces criticism for its ‘socialized loss strategy’ following a $230 million security breach, sparking debate among users and the broader crypto community.
Points
- WazirX proposed a ‘socialized loss strategy’ after a $230 million exploit.
- The strategy involves users absorbing losses, which has been met with backlash.
- Poll conducted by WazirX to gauge user opinion on loss recovery options.
WazirX’s Controversial Loss Strategy
Indian cryptocurrency exchange WazirX is under fire after proposing a ‘socialized loss strategy’ in response to a $230 million security breach. The strategy suggests that users absorb the losses, which has drawn significant criticism from the community.
Poll and Backlash
In a poll conducted on X （formerly Twitter）, WazirX co-founder Nischal Shetty asked users to choose between two options: accessing 55% of their funds without withdrawal rights but getting priority for potential recovery, or accessing 55% with withdrawal rights but with second priority for recovery. The remaining 45% would be converted to USDT and locked.
After significant backlash, Shetty and WazirX clarified that the poll was not legally binding and was intended to gauge user opinions. They reassured users that the team is reviewing all inputs to devise a plan that aligns with the community’s best interests.
Criticism and Legal Concerns
Critics argue that the proposed strategy unfairly penalizes users. CoinDCX co-founder Sumit Gupta stated that the first contribution to losses should come from the company, not the customers. The approach has sparked a broader debate about the responsibilities of crypto exchanges in handling security breaches and user funds.
Hacker Details and Recovery Prospects
The exploit led to the theft of over $100 million in Shiba Inu tokens, 20 million MATIC tokens, 640 billion PEPE tokens, 5.7 million USDT, and 135 million GALA tokens. Trading was halted, and reports suggest that the North Korean state-sponsored Lazarus Group may be behind the hack, making recovery unlikely.
解説
- Socialized Loss Strategy: This approach distributes losses among users rather than having the company absorb them, raising ethical and legal concerns.
- Community Reaction: The backlash highlights the importance of transparent and fair handling of security breaches by crypto exchanges.
- Security Breach Impact: Understanding the details and implications of significant security breaches helps assess the risks and responsibilities in the crypto market.