Indian cryptocurrency exchange Wazirx has answered important questions from its users about the recent cyberattack. The platform explained its socialized loss strategy and the options users have to recover their assets. Additionally, users inquired about asset valuation and token conversion to USDT.
Wazirx Clarifies Recovery Options, Asset Valuation, and USDT Conversion After Cyberattack
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Wazirx Addresses Key Questions Following Cyberattack
On Saturday, Indian crypto exchange Wazirx addressed several important questions from users. This followed the introduction of a socialized loss strategy and a poll aimed at reopening the platform and allowing users to withdraw funds and resume trading after the cyberattack on July 18.
Wazirx announced the implementation of a socialized loss strategy on Saturday to distribute the losses from the $230-million cyberattack across all users, minimizing individual financial impact. The exchange emphasized that this approach, unlike lengthy and costly legal proceedings, spreads the losses and focuses on business recovery through growth and partnerships.
The Indian crypto exchange explained that it locks part of the crypto balances, providing partial access and aiming for a swift platform recovery with a 55/45 asset distribution approach. Wazirx explained the two options available to users, stating:
Option A lets you trade and HODL your crypto assets with priority for recovery efforts, but you won’t be able to withdraw your funds. If you want to start withdrawing your assets later, you can switch to Option B, though you’ll lose your priority in the recovery process.
“Option B lets you trade and withdraw your assets, but recovery efforts will focus on those who chose Option A first. You can switch to Option A anytime before you make any trades or withdrawals,” Wazirx clarified.
The valuation of crypto assets on the platform is based on prices from July 21 at 8:30 p.m. IST, when trading was paused. Users questioned why the valuation was based on July 21 instead of the cyberattack date, July 18. The exchange explained, “The valuation is based on the time when trading was paused, which was 21st July 2024, 8:30 PM IST. The valuation uses average prices from Coinmarketcap and select global exchanges to ensure fairness.”
Moreover, users asked, “Why are you locking 45% of the value in USDT-equivalent tokens instead of locking it in the original form?” Wazirx replied:
In a bear market, prices tend to be low, while in a bull market, they can be high, causing significant fluctuations in the value of cryptos. By locking 45% of the value in USDT-equivalent tokens, we ensure a stable amount for recovery planning.
Additionally, users inquired about their portfolio status, questioning if the visibility of their crypto assets indicated no losses. Wazirx clarified that current portfolio views are based on pre-attack data and will be updated to reflect the new valuation method once trading resumes. This update aims to provide an accurate representation of the users’ assets.
Some users asked a specific question about meme cryptocurrency shiba inu ( SHIB). “If I hold only SHIB, will it automatically be converted to USDT, or do I need to sell and withdraw it?” users asked. Wazirx replied:
SHIB is classified as a stolen token. Therefore, 45% of the value of your SHIB holdings as of 21st July 2024, 8:30 PM IST, will be converted to USDT-equivalent tokens and locked. The remaining 55% will be used to create a balanced portfolio with available crypto assets on the platform.
What do you think about Wazirx’s recovery strategy and options for users after the cyberattack? Let us know in the comments section below.
