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News

WazirX Withdrawal Management Poll Faces Backlash Over Loss Distribution Plan

July 29, 2024 - Around 2 mins mins to read

Key Points:

  • WazirX has been facing heavy criticism for its apparent idea of equitably distributing the losses of $230 million from the recent hack across all its customers.
  • The WazirX withdrawal management poll allows users to provide feedback and considers the various ways of correcting the issue.
  • The exchange failed to provide insurance over customer deposits due to the lack of options.
The “Withdrawal Management Programme: Opinion Poll” by WazirX, one of India’s biggest cryptocurrency exchanges, has come under criticism from industry insiders and customers in the aftermath of a $235 million hack earlier this month.
WazirX Withdrawal Management Poll Faces Backlash Over Loss Distribution Plan

Read more: WazirX Withdrawals Reopened: Users Can Now Reaccess Funds!

WazirX Withdrawal Management Poll Sparks Controversy Over Distributing $230 Million Hack Loss

The exchange said the WazirX withdrawal management poll that measured customer opinions was not legally binding but a preliminary measure. WazirX has confirmed that a feedback form will be implemented to engage its users further.

The proposed plan will socialize the financial loss among all its customers to maintain stability on the platform. WazirX does this to balance the swiftness with which some users would regain access against the potential for recovery by others, all in contrast to traditional methods.

“By socializing the loss, we ensure fairness and preserve stability, aiming for a more efficient resolution,” stated the WazirX withdrawal management poll.

In other news, the Enforcement Directorate of India is alleged to have transferred nearly $1.1 million in crypto-confiscated assets to a WazirX wallet back in January.

Exchange’s Lack of Insurance Complicates Recovery Efforts

According to WazirX VP Rajagopal Menon, they have decided to share the loss by learning from many such scenarios that top exchanges like Mt. Gox and Bitfinex have gone through. He said that they are considering all kinds of moves while actively taking feedback from the users before they make their final move.

In contrast to most large exchanges, WazirX did not buy insurance to cover customer deposits. Company founder Nischal Shetty said that no insurer was willing to offer them viable options to protect deposits. Accordingly, Shetty dismissed any comparisons between WazirX’s case and the collapse of Sam Bankman-Fried’s FTX as he believed the situations were different.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

FTX

hack

India

Rajagopal Menon

WazirX

WazirX Withdrawal Management Poll

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.