WazirX Exchange proposed to Socialise $230 million loss among users

Hello and Namaste Everyone

It's been over 10 days since the hack event with Wazir X Exchange, based in India. It is one of the biggest exchanges in the Indian crypto market and it was hacked for 230 million dollars. This is a big amount and in Indian currency, this amount is almost 2000 crore rupees which is a huge money in Indian currency. This is not the first time when we see the event of exchange hacking because every year we get to see a couple of incidents where exchanges are hacked. Even Binance was hacked but they made sure that funds were safe and they paid the amount to affected users.

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In India, this situation is slightly different as the exchange is trying to distribute this loss among users. One thing to note is that only ERC-20 tokens are stolen and no impact on Bitcoin because it was stored in different wallets. The exchange is trying to follow the practice of socialized laws in which the entire loss will be distributed among all the users of the exchange. Exchange has shared that they have lost 45% of their crypto reserve which will be distributed among users and the remaining 55% will be available for the users soon. They are going to issue stable coins for this value based on the 21st July snapshot which is not fair. This event happened on the 18th of July and ideally, they should follow the snapshot dated that day but they are not doing it. After going through the plan shared by the exchange some of the points I have figured out

• They are focused on loss distribution among users and they are not contributing anything to this. It's full of exchange and not users so ideally they should bear this but they are not doing anything.
• They are pushing the community to accept the proposal with 45% locked funds. There is no concrete plan for repayment as they will explore possibilities of funds recovery and will pay in the future if feasible.
• Somehow it feels like the fault is done from the user's side and the exchange has not done anything because all the loss is coming onto the shoulders of users but the exchange is not paying anything from its pocket. Surely the extent must have made a lot of money through the coin listing and also through the trading but the founders are not willing to use those funds to compensate for the loss.
• Even after the hack event they continued to open the deposits for Crypto and INR and trading was ongoing for another 3 days.
• There was no withdrawal open on the exchange and it was for no reason else people would have withdrawn their crypto whoever wanted to hold for the long term. This is a matter of trust but the exchange has broken it.

I think it is not fair to distribute the loss among all the users. They are doing it with users who are not affected and this is not a fair practise. They need to understand that the proposal they are bringing should be focused on the community but it is mostly focused on the exchange and how they can save themselves. It is the time when they need to do their best to gain the trust but unfortunately, they are not doing it even now they are not very transparent about the holding and they have also never shared their profit and loss with the community. They need to understand that it's their fault and they must bear the loss but sadly the approach is the opposite where the community is not the priority for them. I feel sad for the people who had kept their hard-earned money and their savings in the crypto exchange but it is lost where they have not done anything wrong.

Thank you so much
Stay Safe

Posted Using InLeo Alpha