WazirX Draws Backlash Over ‘Socialized’ Recovery Plan, Asks Binance for Help

Indian crypto exchange WazirX which lost over $230 million of users’ funds in a massive hack has proposed a controversial recovery plan that involves distributing the loss to all WazirX users.

The exchange’s strategy to distribute the impact equitably among all users has drawn backlash from the local crypto community.

On 27th July, WazirX proposed a poll giving two options to its users:

Option A: Users can trade and hold their crypto with priority for recovery but cannot withdraw it.
Option B: Users can trade and withdraw their crypto but will have lower priority for recovery. Users can switch to Option A before making trades or withdrawals.

The poll for WazirX users ends on August 3.

The distressed exchange today revealed in a post on X that they are currently reviewing all the inputs from the users to devise a plan that truly aligns with the community’s best interests.

“We aim to develop a plan that incorporates your collective voice and ensures a fair and effective outcome,” it added.

WazirX CEO Nischal Shetty clarified on X that this poll is not legally binding upon the users.

1. This poll is a preliminary step to understand your opinions.
2. This poll is not legally binding upon the users or WazirX
3. We will soon launch feedback form to collect more ideas
4. We are now looking into next steps based on all the feedback received

This is a major… https://t.co/tcdDjWzIYI

— Nischal (Shardeum) 🔼 (@NischalShetty) July 29, 2024

CEO and founder of CoinDCX, Sumit Gupta, criticised WazirX’s approach to the recovery, saying,

“WazirX is handling this entire situation isn’t community first and this IMO won’t go down well for them. This sadly is also hurting the other ecosystem participants.”

Hate to be saying this, but the way @WazirXIndia is handling this entire situation isn't community first and this IMO won't go down well for them. This sadly is also hurting the other ecosystem participants.

The first contribution to losses should ALWAYS come from the Company…

— Sumit Gupta (CoinDCX) (@smtgpt) July 29, 2024

WazirX Reportedly Approached Binance for Help

As per a report from MoneyControl, WazirX has approached former partner Binance for help in bailing out customers affected by the $230-million cyberattack.

Binance controls around $80 million worth of WRX tokens as of the date of the hack. As of now, the hacked exchange can not use its own funds to pay back some part of the customer assets that were stolen, the report noted citing an anonymous source close to the matter.

Earlier, WazirX had a controversial fall out with Binance, ending the partnership between the exchanges.