CoinDCX CEO Says WazirX Hack Compensation Plan Is “Utter Nonsense”

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As a seasoned crypto investor with several years of experience under my belt, I strongly disagree with WazirX’s proposed compensation plan for users affected by the recent hack. The way the exchange is handling this situation raises serious concerns about their commitment to their customers and prioritizing business interests over community welfare.

Sumit Gupta, the CEO of CoinDCX, has strongly criticized the proposed reparation scheme put forward by WazirX for their users who were affected by a major hack earlier this month. Gupta’s remarks highlight the mounting dissatisfaction within the cryptocurrency community concerning how WazirX managed the hack and its subsequent events.

CoinDCX CEO Slams WazirX Hack Compensation Plan

Gupta made comments regarding a poll conducted by the suspect Indian trading platform, WazirX, after a cyberattack resulted in the loss of 45% of users’ funds. The poll presented two alternatives for affected users aiming to recover their resources. WazirX’s handling of the situation has drawn intense criticism.

Gupta’s critique centers on the inadequacy of WazirX’s reaction. He believes that the crypto exchange put business interests ahead of customer well-being during this incident. In simpler terms, “Gupta expressed disappointment over how WazirX managed this situation, prioritizing company profits over user care.”

He also stressed that the company and its resources ought to bear the brunt of any incurred losses, instead of being imposed on the customers. Furthermore, he dismissed the proposed compensation plan as completely irrational.

As a crypto investor, I haven’t witnessed any concrete action from the company regarding the significant losses we’ve faced. Instead, asking us to bear the brunt of a 45% decrease seems illogical and irrational. The poll options presented also prioritize the business over the customers.

From a different perspective, Gupta showed faith in the compromised exchange’s team rethinking their strategy. He emphasized, “I can only hope they will reconsider their actions and act fairly towards their customers.” Nevertheless, some concerns, like the tax consequences of compulsory token swaps, are still unclear at this point.

WazirX Hack Poll Options

The compensation poll, updated every 15 minutes, presents users with two choices:

1. Utilize 55% of Your Funds with No Withdrawal Option: With this choice, users can tap into 55% of their investment funds. However, they cannot make instant withdrawals. Instead, the remaining 45% gets converted into Tether (USDT) or other supported tokens. Users keep priority for any potential future recovery payouts.

Users can opt for withdrawing 55% of their portfolio funds in this scenario, with the rest being converted into USDT or other tokens. Nonetheless, those who select this alternative will rank lower in the queue for any prospective recovery benefits.

Issues With The Proposed Compensation

As someone who has closely followed the cryptocurrency market for years and has gone through my fair share of market volatility and exchange-related issues, I find myself deeply concerned about the recent events at WazirX. The snapshot for valuing user portfolios taken on July 21, just three days after the devastating hack that led to massive losses for users, raises serious questions in my mind.

Users will receive a compensation package worth an equivalent value to the stolen assets in the form of a selection of tokens. The value of these tokens will be determined based on the average prices from CoinMarketCap and various global exchanges as of July 21, 2024, at 8:30 p.m. IST. This compensation addresses the monetary loss but does not tackle concerns related to the chosen snapshot date.

Moving forward, a 1% Tax Deductible at Source (TDS) will be imposed on the conversion of stolen tokens into a balanced crypto portfolio. Moreover, there is a potential 30% capital gains tax for users on any increased value of replaced tokens. This extra financial obligation might further strain those who are already grappling with substantial losses if the exchange fails to assume responsibility.

Additionally, WazirX has disclosed intentions to establish daily withdrawal caps, limiting users to accessing only 55% of their funds. This limitation adds to the financial constraints users face. The deadline for more details regarding the WazirX hack incident is slated for August 3, 2024.

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2024-07-29 14:28