WazirX to Reimburse Full $230 Million to Hack Victims

By Mark Hunter

1 day agoMon Aug 12 2024 07:28:30

Reading Time: 2 minutes

• WazirX has decided to restore user balances to pre-hack levels following a $230 million hack
• The exchange has faced criticism for its initial reimbursement plan, which involved a 45% portfolio rebalancing
• After customer complaints, WazirX has committed to restoring balances to their July 18 levels

Hacked Indian cryptocurrency exchange WazirX will restore user balances to how they were before last month’s $230 million hack. The decision comes after the exchange was criticized for its initial reimbursement plan involved rebalancing crypto portfolios to the tune of 45 per cent in order to get the process done quickly. After customers complained, WazirX has caved and stated that user balances will be restored to their levels on July 18, before the hack took place.

Blame Game Followed Hack

Following the breach last month, WazirX halted both rupee and crypto withdrawals and paused trading. Nearly half of the platform’s reserves were siphoned off from a Multi-Signature (MultiSig) wallet managed by third-party custody service provider Liminal, resulting in WazirX blaming Liminal and Liminal blaming WazirX.

A week and a half after the hack, WazirX co-founder Nischal Shetty noted that recovering such a large amount could take a long time and made a proposal that did not go down well with his customers: he suggested that the quickest way to reopen the platform was to rebalance crypto portfolios and distribute the losses among all users to the tune of just 45 per cent.

This resulted in uproar, with customers complaining that they were being made to pay for the exchange’s poor security. On Friday, three weeks after the incident, WazirX has finally found itself able to refund customers in totality, as it revealed in a statement:

We are actively listening to your feedback and taking decisive action to address your concerns! After careful consideration of the situation and the feedback received from numerous users, we are constrained to restore the balances of all accounts and undo all trades carried out on the WazirX platform following the stoppage of withdrawals on 18 July 2024, 1 PM IST.

While this is good news for some, it won’t be for all, as all trades made since the date of the hack have been reserved. Bitcoin was at $65,000 on the date, since when it has dropped to $49,000, so anyone who traded on the belief it was going higher last month gets a do-over. However, anyone who traded off the bounce from $49,000 to $61,000 will lose their profits.

WazirX stated that trading and withdrawals have both been halted and will not be processed during this time, adding that the process will be carried out ‘over the next few days’ but didn’t give a deadline.