WazirX asks Binance for lifeline amid recovery plan controversy
Indian crypto exchange WazirX, which recently lost $230M in a hack, has drawn criticism for its planned response, passing the loss on to users. As complaints and dissatisfaction increased, WazirX asked for help from its former partner – Binance to help come up with a way to compensate the affected customers.
WazirX features a more consistent but problematic recovery plan
The platform's new recovery plan has come under fire after WazirX recently fell victim to a cyber attack and lost nearly $230 million of its users' funds. The proposal aims to spread the loss across all WazirX users, which is a disastrous decision for them, especially for Indian users of the platform.
On July 27, WazirX introduced a public opinion offering users two options to manage their crypto assets:
1. Option A: Users can trade their crypto even if they can't withdraw it and prioritize recovery in case of attack.
2. Option B: Again, users say and withdraw crypto and don't always prioritize recovery. Users can select option A before any transaction or checkout.
Voting ends on August 3, and Wazirx has promised to review customer input to come up with a plan that will benefit the community. It was important for Wazirx CEO Shetty to point out that the election is not legally binding.
WazirX seeks help from Binance.
In this regard, WazirX has sought help from previous partner Binance to help customers who have lost money. According to MoneyControl's sources, Binance had about $80M worth of WRX tokens on the day of the hack. As such, the exchange cannot perform the compensation itself, which forces them to reach Binance.
These two exchanges have a history of Binance's previous relationship with WazirX, but the association was dissolved due to problems. After court battles and, more recently, a dispute between the two, WazirX sought help from Binance to provide financial support to compensate the costs the hacker imposed on the company.
An anonymous source cited by MoneyControl said that negotiations between WazirX and Binance are at a very early stage. The source also revealed that WazirX is still in a legal dispute with Binance, with Binance still controlling some of WazirX's operations, such as exchange revenue and the WRX token.
