India’s largest crypto exchange, WazirX, is facing backlash after losing massive Shiba Inu in a hack.
WazirX recently faced a significant breach, losing approximately 5.4 trillion Shiba Inu tokens. Ten days after the cyberattack, the crypto community’s frustration has been growing, particularly after prominent figure Lola highlighted concerns on social media.
Notably, the exchange announced a controversial compensation plan, converting 45% of SHIB holdings into USDT-equivalent tokens while using the remaining 55% to create a balanced portfolio of available crypto assets on the platform. This plan is reportedly based on valuations from July 21, when trading was paused. The valuation also uses average prices from CoinMarketCap and select global exchanges to ensure fairness.
Criticism and Alternative Solutions
Following this announcement, which went public on July 27, community figure Lola voiced her discontent, emphasizing the unfairness of WazirX’s approach. She acknowledged the Shibarmy’s frustration, suggesting that affected users could consider reallocating their compensated holdings back to SHIB.
#SHIB #WazirX
SHIB is officially a stolen token at #WazirXIndia . If you lose all your SHIB from the hack , they will give you this option below 👇
I am sorry that the Shibarmy in India is experiencing this . I dont agree with their solution at all but if you get the 55%… pic.twitter.com/xd7jJwv6uw
— Lola (@CryptoLollla) July 27, 2024
Lola’s observations underscore a critical issue: users bearing the financial brunt of an exchange’s security lapse. The platform’s reliance on a socialized loss strategy, which distributes losses across all users, has not sat well with many, raising questions about accountability and fairness.
Debate Intensifies Over WazirX’s Response
Critics particularly argue that the exchange is shifting the burden onto users, with one commenter suggesting that exchanges should take more responsibility for protecting user funds.
Another member of the Shiba army went on to advise users to always transfer their tokens to cold wallets instead of leaving them on exchanges. Another user, Abraham Naidoo, also questioned the exchange’s solutions, suggesting the hack seemed suspicious and criticizing WazirX for offering USDT instead of replacing the lost Shiba Inu tokens.
Bounty Program and Recovery Efforts
It is also important to note that, in response to the hack, WazirX initiated a bounty program aimed at recovering the stolen assets, including $100 million in Shiba Inu.
The program has two parts: the “track and freeze” initiative, offering up to $10,000 for information leading to the freezing of assets, and a “white hat recovery” bounty, rewarding ethical hackers up to 10% of the amount they help recover. This initiative has already attracted 80 participants.
