In the wake of a significant cyberattack on July 18, Indian cryptocurrency exchange WazirX has addressed pressing concerns from its users regarding the platform’s post-cyberattack recovery. The company has introduced a socialized loss strategy and outlined recovery options to aid users in managing their assets amidst the fallout. The platform also clarified valuation methods and asset conversion details in response to user inquiries.
WazirX’s Socialized Loss Strategy and Post-Cyberattack Recovery Options
On Saturday, WazirX detailed its approach to distributing the impact of the recent $230 million cyberattack. The exchange has implemented a socialized loss strategy, which aims to mitigate individual financial burdens by spreading losses across all users. This strategy is designed to avoid lengthy and costly legal battles, focusing instead on business recovery through growth and strategic partnerships.
The platform has opted for a 55/45 asset distribution model. In this model, WazirX locks a portion of users’ crypto balances, providing only partial access while it works on platform recovery. Users are presented with two options:
- Option A allows users to trade and hold their assets with priority in recovery efforts, but without the ability to withdraw funds. Users choosing this option will retain priority for future recovery efforts.
- Option B permits users to trade and withdraw their assets, but Post-Cyberattack Recovery efforts will primarily focus on those who opted for Option A. Users can switch to Option A before making any trades or withdrawals if they wish to regain priority in the recovery process.
Valuation Methods and Conversion Clarifications
In response to questions about asset valuation, WazirX explained that the value of crypto assets is based on prices from July 21 at 8:30 p.m. IST, when trading was halted. Users had queried why the valuation date was July 21 rather than the attack date, July 18. The exchange justified the choice by noting that July 21 is when trading was paused, and average prices from Coinmarketcap and selected global exchanges were used to ensure fairness in the valuation.
Furthermore, users were concerned about the decision to lock 45% of the asset value in USDT-equivalent tokens rather than the original form of the assets. WazirX clarified that during bear markets, crypto prices are low, whereas they can be high in bull markets. Locking a portion of the value in stable USDT-equivalent tokens ensures a more stable foundation for post-cyberattack recovery planning.
Portfolio Status and Specific Token Queries
Users also sought clarification on the visibility of their portfolios and whether it indicated the absence of losses. WazirX assured users that current portfolio views are based on pre-attack data and will be updated to reflect the new valuation once trading resumes, providing a more accurate representation of users’ assets.
Inquiries about specific tokens, such as the meme cryptocurrency Shiba Inu (SHIB), were also addressed. Users asked whether SHIB holdings would be automatically converted to USDT or if they needed to take additional steps. WazirX responded that SHIB is categorized as a stolen token, meaning that 45% of the value of SHIB holdings as of July 21, 8:30 PM IST, will be converted to USDT-equivalent tokens and locked. The remaining 55% will be used to balance the portfolio with available crypto assets on the platform.
WazirX’s detailed responses aim to provide users with clarity and assurance as the platform navigates the recovery process and prepares to resume full trading activities.
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