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WazirX, an Indian cryptocurrency exchange, has introduced a socialized loss management plan after a significant cyber breach that led to the siphoning off approximately $230 million, impacting 45% of users’ funds. This novel strategy aims to fairly address the aftermath, restore stability, and minimize disruptions for its users.
In an official announcement, WazirX expressed its firm dedication to transparency and equity. They have introduced a recovery strategy known as “55/45,” wherein 55% of impacted assets will be promptly available for trading or withdrawals.
In response to the recent cyber attack that led to the theft of $230 million (45% of user funds), we are committed to handling the situation fairly and transparently. We are implementing a socialized loss strategy to distribute the impact equitably among all users.
To manage the… pic.twitter.com/uOKvxWuEip
— WazirX: India Ka Bitcoin Exchange (@WazirXIndia) July 27, 2024
The remaining 45% will be transformed into tokens equal to USDT and temporarily secured. This strategy aims to strike a balance between quick accessibility to some user funds and the possibility of further recuperating the secured assets.
WazirX will rebalance user portfolios by utilizing 55% of their assets. In cases where compromised tokens are involved, they will be substituted with a diverse range of unaffected cryptocurrencies from the platform. This method guarantees that users will always receive an equal value, even if their portfolio includes stolen tokens.
WazirX’s Ongoing Efforts to Recover Stolen Assets
WazirX is also focusing on ongoing recovery efforts, including potential airdrops and other strategies to reclaim the stolen funds. The value of the released portfolio will be based on average market prices from CoinMarketCap and other global exchanges as of July 21.
Users will be prompted to select their preferred recovery option via a poll, with the deadline set for August 3. The poll will inform WazirX’s final decision but is not legally binding. The exchange emphasizes that the final recovery plan will consider poll results, liquidity, and additional factors from ongoing investigations.
For those who hold a mix of cryptocurrencies, the 55/45 strategy will apply proportionally. If the entire portfolio consists of stolen tokens, WazirX will replace 55% of these assets with a basket of unaffected tokens. In case both stolen and unaffected tokens are in a person’s portfolio, the platform is going to unlock the total value at stake by up to 55% and balance off the stolen portion with unaffected assets.
Source: WazirX
Users who only have INR will not see any change because they can still access all their INR funds. For mixed portfolios, INR funds will be accessible based on user choice, while crypto assets will be managed, according to the 55/45 plan.
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