WazirX launches fund recovery plan after $230 million hack
Indian crypto exchange WazirX has announced a recovery strategy for user funds as part of its efforts to address the latest cyber attack in which nearly $230 million was stolen.
The hack, which affected 45% of user funds, led WazirX to implement measures aimed at minimizing disruption to its users and maintaining platform stability.
An approach to loss distribution
In a blog post, WazirX announced that he opted for the 55/45 approach. This approach allows users to instantly access 55% of their wealth by locking the remaining 45% in Tether (USDT)-equivalent tokens.
This method is in stark contrast to the prolonged instability that occurs under similar conditions. By socializing the damage, WazirX aims to spread the impact evenly across all users, preventing any group from bearing a disproportionate burden. This approach is expected to facilitate a faster and more flexible solution than traditional methods.
WazirX is offering two different options for users to manage their balances. Each option has its own prerequisites, which are communicated to users through the WazirX app or website.
According to the exchange, registered users will receive detailed instructions by email, guiding them through the process of choosing the option they prefer. Deadline for response is 3rd August 7:00 am IST.
Asset management strategy
While the election is not legally binding, the results, ongoing investigations and the fluidity of the forum will influence the final decision. By participating in the Public Comment, the Users acknowledge that they have read and unconditionally agree to the terms, which shall be governed by the WazirX Terms of Use.
Related: Liminal Blames Broken WazirX Devices for Hacking
WazirX forms a portfolio of various crypto assets to manage the 55% of users' assets that are open. This approach aims to minimize the impact on users with compromised tokens. If any affected tokens are included in the open segment, they will be exchanged with unaffected crypto assets to keep the portfolio balanced.
The price of the open portfolio is calculated based on average prices from CoinMarketCap and select international exchanges starting July 21 at 8:30 pm IST. Wazir X announced that it will resume operations shortly after users complete the selection process to select their preferred asset management option.
The WazirX breach resulted in a massive loss of nearly $235 million, making it the second-largest central exchange hack in recent times, surpassing the DMM exploit on May 31, which saw a loss of $305 million.
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