July 27, 2024 – In a significant move to address the recent cyber attack, cryptocurrency exchange WazirX has initiated a Withdrawal Management Poll to gather user opinions on managing their funds post-attack. The attack resulted in the theft of approximately $230 million, representing 45% of user funds. The poll, set to expire on August 3, 2024, aims to establish a fair and transparent approach to handling the aftermath.
Key Details of the Poll
Balanced Portfolio Strategy:
WazirX plans to create a balanced portfolio for users’ unlocked assets, equivalent to 55% of their total holdings. This will involve using a basket of available crypto assets on the platform. For users whose unlocked portfolios include affected tokens, WazirX will replace the affected portion with unaffected crypto assets from the platform.
Example:
- Total Value Unlocked (55%): INR 55
- Unaffected Token Value: INR 40
- Replacement of Stolen Tokens: INR 15 (using balanced crypto assets)
Options for Managing Funds:
Option A:
- 55% of crypto assets will be available for trading and deposits.
- The remaining 45% will be converted to USDT-equivalent tokens and locked.
- Locked tokens will be released on priority based on the recovery of stolen funds.
Option B:
- 55% of crypto assets will be available for staggered withdrawals.
- The remaining 45% will be converted to USDT-equivalent tokens and locked.
- Locked tokens of Option B will be released after all tokens in Option A have been distributed.
Socialized Loss Strategy
WazirX is implementing a socialized loss strategy to distribute the impact across all users. This approach aims to provide quicker access to a significant portion of assets while maintaining the possibility of priority recovery for those who choose not to withdraw immediately. By doing so, WazirX ensures fairness across its user base and preserves the exchange’s stability.
Guidance from Industry Precedents
In formulating these options, WazirX has drawn on principles from company restructuring and guidance from other crypto exchanges like Mt. Gox and Bitfinex, which faced similar challenges. The goal is to maximize recovery, keep the exchange operational, and prevent further losses.
Conclusion
WazirX’s proactive approach through the Withdrawal Management Poll seeks to address user concerns transparently and efficiently. The options presented aim to balance immediate access to funds with potential recovery, ensuring the long-term stability of the exchange. Users are encouraged to participate in the poll to voice their preferences and help shape the recovery strategy
