Crypto Community Slams WazirX’s ‘Socialized Losses’ Plan After Hack
Facing this crisis, WazirX is required to regain confidence by proving to its customer base and the broader crypto community that they are back on their feet.
The handling of the issue that emerged after WazirX carried out an unauthorized transfer of $230 million that led to the loss of the cryptocurrency exchange has met with discontent from its user base. They put forward a proposal to distribute the loss among the users themselves and the broad client base that was neither approved nor rejected by the clients.
They released socialized losses to the traders and the votes for it were 55% in favor of the option, but amongst the users, there was a significant number downvoting their decision. This practice especially amazed the customers as in the first vote on the matter, there was only one option available and that was to delete the coins out of confirmed loss users’ accounts or to dilute the funds of all users.
Outrage Among Users
The 55/45 plan administered that only the Indian users would operate 55% of their total assets while the remaining 45% would be exchanged and thus locked in the form of USDT or any other tokens that were available. These tokens would be restricted for trading purposes on the exchange. This decision is not debatable and would be the same for all the users who had or had not been affected by the theft.
The vote for the 55/45 plan option which began on July 27 and lasted until Aug. 3, showed a massive disapproval of the suggestion. The users spoke against it. The users drew attention to the fact that the implementation of the plan failed to fairly impact losses resulting from an exploit in the platform.
A certain user who went by the alias @aaakasei disapproved of the move on his Facebook profile, spelling out some of his mind about Nischal Shetty, the CEO of WazirX:
“…My advice for Nischal Shetty: hey man, just file for bankruptcy, remove Twitter, and make memecoins…”
Other user, @TakaSacca19744, wondered whether the transparency and accountability are the issues with the exchange, and why it appears to be stalling and not fulfilling its obligations to the users by giving too long resolution time and providing the information is unfair.
Community Demands Better Security
The negative sentiment is clearly demonstrated in the 55/45 pole where WazirX users are not satisfied with the process and, moreover, many users are now deprived from the opportunity of taking their money out. The hacking of the company followed with the refusal to communicate the necessary info and the ongoing questions from their user base regarding safety have resulted in widespread feelings of distrust and insecurity.
Despite this fact, one of the co-founders of WazirX, Nischal Shetty, has clarified a bit since then that the surveys done were not discussions about making contracts, only a function to consult with the community to decide what they would prefer. Moreover, the Indian cryptographic exchange also made a rebuttal to the accusing by TruthLabs asking how, if thea were so insecure, were they hacked for an amount as big as $230 million, to which the exchanges answered that there had been no mistakes about their security measures.
An attack on the exchange has recently required that the Bharat Web3 Association (BWA) in India focuses on the construction of tough cybersecurity systems and implementation of fraud protection measures in the crypto industry.
