After hacking WazirX for $230 million (45% of all client funds), the exchange team proposed a "fair and transparent social loss strategy."
The initiative implies instant access to most of the assets (55%), while maintaining the possibility of further recovery for "those who prefer to wait."
"By pooling losses, we ensure fairness within our user base and maintain the stability of the exchange. This approach balances quick access for some with potential recovery for others, aiming to resolve the situation more effectively than traditional procedures," the platform said in a statement.
WazirX co-founder Nishal Shetty outlined, in his words, two ways for the exchange to develop after the hack:
Nothing is impossible if WazirX can survive this. It will grow and if it makes profits those can be used for recovery.
But, it’s only possible if all our customers support us at this time.
Historically there have been two options that exchanges which faced such situation…
He suggested going down the path of litigation, which would take years and involve legal costs. The option of "social losses" is more profitable because it will help "develop business and find more new solutions," he added.
WazirX also initiated a survey in which, according to CoinDesk, customers were asked to vote for two options: access to 55% of funds without the possibility of withdrawal, but with priority for any potential recovery funds, or access to 55% of funds with the possibility of withdrawal, but with a lower priority for refund.
The remaining 45% will be converted to USDT and blocked.
After the negative reaction from the community, WazirX and Shetty published appeals stating that the survey did not "have legal force."
"Our team is currently studying all the proposals in order to develop a plan that will truly meet the best interests of customers. We strive to develop a plan that will take into account your collective voice and ensure a fair and effective result," the representatives of the trading platform wrote.
In the address of the CEO of the exchange, he advocated the option of "social losses", since this would allow the exchange to resume work, while simultaneously exploring the possibilities of compensation.
Many have criticized this approach because it punishes users for the error of the exchange itself. CoinDCX co-founder Sumit Gupta said that the company should make the first contribution to the losses.
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…
"Forcing customers to absorb 45% of losses directly is complete nonsense. The survey options are also formulated in such a way as to primarily protect businesses, not customers," he said.
Recall that after the attack, WazirX announced a reward for assistance in returning funds, and also notified about contacting law enforcement agencies.