Indian crypto exchange WazirX to distribute breach impact among users, offering immediate access to 55% of funds while locking 45% in USDT.
Indian cryptocurrency exchange WazirX is taking significant steps to manage the aftermath of a massive $230 million cyberattack. The exchange has decided to implement a "socialized loss" strategy to distribute the financial impact of the breach among its users. This approach aims to balance immediate access to funds with the potential for future recovery.
WazirX's socialized loss strategy involves making 55% of users' crypto assets immediately accessible. The remaining 45% will be converted into USDT-equivalent tokens and locked. This means that while users can access a significant portion of their assets right away, the rest will be held in a stable cryptocurrency, with the hope that these funds can be recovered over time.
The socialized loss strategy affects 45% of user funds, which will be locked and converted to USDT. This approach aims to distribute the loss equitably among all users, rather than placing the entire burden on those directly affected by the cyberattack. By doing so, WazirX hopes to maintain user trust and provide a pathway for potential recovery of the lost assets.
While WazirX's approach is designed to manage the impact of the cyberattack, it has raised concerns among some users and experts. Questions about the legality and fairness of using non-affected cryptocurrencies to cover losses have been brought up. Additionally, the concept of locking a portion of users' funds, even if converted to a stable cryptocurrency like USDT, has led to some skepticism.
WazirX plans to resume operations soon, with the hope that their socialized loss strategy will help stabilize the situation and pave the way for future recovery. The exchange has cited examples of how other cryptocurrency platforms have managed similar situations, suggesting that this approach could be effective in the long run.
As the deadline approaches, users are encouraged to carefully consider their options and make an informed decision about how to proceed with their assets on the platform.
