WazirX Under Fire from the Industry Over Unfair Tactics

Following a major security breach at WazirX resulting in a loss of $234.9 million, the platform is facing criticism from the crypto industry over its proposed compensation plan, which asks users to accept losses of up to 45%.

Points

• WazirX suffered a security breach, losing $234.9 million.
• The platform proposed a compensation plan asking users to accept up to 45% losses.
• Industry leaders and investors criticized the plan for its lack of fairness and transparency.
• Calls for a probe by the Central Bureau of Investigation （CBI） have emerged.

WazirX, a prominent cryptocurrency exchange, is under fire from the crypto industry following a significant security breach that resulted in a loss of $234.9 million （approximately Rs 2000 crore）. The breach, potentially linked to the North Korean Lazarus Group, has led to widespread criticism over the platform’s proposed compensation plan.

The “⁵⁵⁄₄₅” compensation plan proposed by WazirX has sparked outrage among both investors and industry leaders. Under this plan, users would receive immediate access to 55% of their assets, while the remaining 45% would be held in Tether （USDT）-equivalent tokens. This approach aims to distribute the loss impact evenly among users and facilitate a quicker resolution. However, many view this as an unfair burden on users, who are being asked to bear significant losses due to the platform’s security failures.

Major crypto industry leaders in India and worldwide have condemned WazirX’s handling of the breach and the proposed compensation plan. Sumit Gupta, a prominent industry figure, argued that WazirX’s strategy of passing 45% of the losses onto customers is both unfair and detrimental to the broader cryptocurrency ecosystem. He emphasized that the company should have been more proactive in absorbing the financial impact from its own assets and treasury rather than shifting the burden to its users.

Similarly, Dr. Sathvik Vishwanath criticized WazirX’s lack of accountability, pointing out that the two options given in the poll are both one-sided. The community’s reaction has been overwhelmingly negative, with many users demanding a more transparent and fair resolution.

In response to the backlash, there have been calls for a probe by the Central Bureau of Investigation （CBI） into the alleged hack. Additionally, the Federal Bureau of Investigation （FBI） has contacted WazirX to assist in investigating this major cyberattack.

The handling of this crisis has significant implications for WazirX’s reputation and future. The company faces a critical challenge in restoring user trust and addressing the concerns raised by critics. If the situation is not managed effectively, it could lead to long-term damage to WazirX’s market position and credibility within the cryptocurrency community.

解説

• The WazirX security breach and its proposed compensation plan have sparked significant controversy within the crypto industry.
• The “⁵⁵⁄₄₅” compensation plan is seen as unfair, placing a heavy burden on users to absorb losses due to the platform’s security failure.
• Industry leaders argue that WazirX should have absorbed the financial impact from its own assets instead of shifting the burden to users.
• Calls for a probe by the CBI and the FBI’s involvement highlight the severity of the situation.
• The handling of this crisis is critical for WazirX’s future reputation and market position, emphasizing the need for transparency and accountability.