As an analyst with years of experience in the crypto industry, I must admit that WazirX’s decision to restore all account balances and undo trades following the massive hack is a bold move, albeit one that raises questions about its long-term implications.
Last Thursday, WazirX, a cryptocurrency exchange based in India, disclosed their intention to reimburse affected clients following a significant hack they experienced earlier in July. They unveiled that they will reinstate the account balances of all users and nullify trades executed between July 18th and July 21st.
WazirX To Restore All Account Balances
On July 18th, WazirX suffered a security breach that drained around $235 million from one of its trading platform’s multisignature wallets. This cyber theft netted massive amounts of Ethereum (ETH), Shiba Inu (SHIB), Pepe (PEPE), Matic Network (MATIC) tokens, and others, leaving many users without their assets.
Due to the theft, the platform temporarily stopped functioning and initiated a strategy to retrieve the misappropriated funds. In connection with this effort, the bounty program allotted approximately $23 million (10% of the stolen amount) as rewards for individuals who helped WazirX’s team in recouping the tokens from the unscrupulous parties.
In a recent update, the Indian trading platform WazirX has outlined measures to alleviate user worries and reimburse impacted clients after a major cyber attack. According to their statement, by 1 PM IST on July 18th, 2024, they plan to reinstate the balances of every account following the temporary suspension of withdrawals.
Furthermore, all trades executed on the platform from when withdrawals ceased to the halt of trading activities on July 21 are set to be reversed. WazirX clarified that this “decisive step” was taken following thorough deliberation based on input from impacted users.
As an analyst, I’m here to inform you that we are in the process of restoring portfolio balances on our platform, WazirX, back to their state as of July 18, 2024, 1 PM IST. This restoration will take place over the coming days. Users who were impacted by this change can expect an email detailing any affected trades.
The cryptocurrency trading platform explained that the restoration process would apply solely to transactions made after July 18, in order to guarantee fair treatment for all users in light of the anomaly caused by the cyberattack.
According to the notification, all current and pending transactions will be terminated during the system restore process. Furthermore, any Trade Dispute Settlements linked to unsuccessful trades, along with related fees and referral benefits, will be refunded and reversed for the impacted users.
Crypto Community Criticizes Next Step
The clients of WazirX held varied perspectives concerning the action. Some pleased customers endorsed the move as a “positive step,” while other users voiced disapproval over the choice to reverse trades executed following the cyberattack.
Some users believed the platform should have halted all activities on the day of the hack, not just withdrawals. Customers were still able to use the platform for three days before the decision to halt trading was made public.
Consequently, these customers might experience disruption due to the restoration process. Furthermore, some local residents expressed that this action was more like correcting an error, rather than a proper solution, after three weeks had passed.
Just like WazirX, another platform encountered criticism for delaying its return to normal operations. Those users who were not involved in the hack find the inability to access their funds troublesome, as it seems to cause unneeded complications.
1. The statement revealed that activities will continue to be halted until the recovery process is completed. To others, it seems like the cryptocurrency platform is accumulating unused funds by delaying the resumption of withdrawals for unaffected accounts.
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2024-08-09 14:12