In the wake of a recent hack on WazirX, which led to a $230 million exploit, the cryptocurrency exchange has faced strong criticism for its proposed “socialized losses” plan. The plan, known as the 55/45 approach, has been met with significant backlash from the exchange’s users and the broader crypto community.
Outrage Among Users
WazirX proposed the 55/45 approach, which suggested that users could only trade 55% of their assets on the platform. The remaining 45% would be converted into USDT stablecoin or other tokens and locked on the platform. This policy would apply to all users, regardless of whether their funds were affected by the hack.
A user poll conducted between July 27 and August 3 revealed overwhelming disapproval of the measure. Many users felt the plan unfairly impacted all users, not just those who suffered losses. For example, one user, @aaakasei, expressed their frustration on social media, suggesting drastic actions for WazirX’s CEO, Nischal Shetty. Another user, @TakaSacca19744, questioned the exchange’s transparency and accountability, criticizing its slow response in resolving the issue.
Also Read: WazirX Users Demand CBI Probe After $234.9 Million Hack
Community Demands Better Security
The backlash against the 55/45 approach reflects the growing frustration and uncertainty among WazirX users, many of whom cannot withdraw their funds. The exchange’s handling of the hack and subsequent communication has left the user base feeling vulnerable and unsure about their investments’ future.
In response, WazirX co-founder Nischal Shetty clarified that the poll was merely a way to gather community feedback and was not a binding decision. Furthermore, the Indian cryptocurrency exchange denied allegations by TruthLabs regarding security vulnerabilities that reportedly led to the substantial hack.
The incident has prompted the Bharat Web3 Association (BWA) in India to prioritize developing robust cybersecurity frameworks and enhanced consumer protection protocols within the crypto industry.
