WazirX

Shiba Inu

Shiba

Source

<ul> 
 <li>WazirX’s socialized loss strategy post-hack faces significant backlash from users and industry leaders.</li> 
 <li>Legal and tax challenges arise from WazirX’s asset conversion compensation plan.</li> 
 <li>WazirX engages the community with a bounty program to track and recover hacked assets.</li> 
</ul> 
<p>WazirX, an Indian cryptocurrency exchange, is experiencing backlash after disclosing a plan for a “socialized loss strategy on the hack on July 18, which resulted in a loss of around $230 million, or nearly 45% of the exchange’s total assets, including a significant amount of Shiba Inu tokens.&nbsp;&nbsp;</p> 
<p>The <a href="https://cryptonewsland.com/wazirx-unveils-230-million-recovery-plan-following-cyberattack/" target="_blank" rel="noreferrer noopener sponsored nofollow">compensation plan</a> proposed by WazirX includes two main options for affected users. The first allows users to access 55% of their funds without the ability to withdraw immediately, ensuring priority in recovering the stolen assets.&nbsp;</p> 
<p>The second option allows users to access and withdraw the same percentage of funds but prioritizes them less for recovering any additional lost assets. The remaining 45% of user assets would be converted to USDT or other available tokens, effectively locking them until further notice.</p> 
<h2 class="wp-block-heading" id="h-industry-response-to-the-compensation-proposal">Industry Response to the Compensation Proposal</h2> 
<p>CoinDCX’s CEO, Sumit Gupta, has strongly objected to WazirX’s post-<a href="https://cryptonewsland.com/wazirx-hacker-transfers-57-million-in-stolen-funds-to-new-crypto-wallets/" target="_blank" rel="noreferrer noopener sponsored nofollow">hack</a> compensation handling. Gupta criticizes the approach as not being customer-centric and accuses WazirX of prioritizing business continuity over user welfare. His comments reflect a broader dissatisfaction within the cryptocurrency community regarding how exchanges manage security breaches and the aftermath.</p> 
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   <p lang="en" dir="ltr">Hate to be saying this, but the way <a href="https://twitter.com/WazirXIndia?ref_src=twsrc%5Etfw">@WazirXIndia</a> 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. <br><br>The first contribution to losses should ALWAYS come from the Company…</p>— Sumit Gupta (CoinDCX) (@smtgpt) <a href="https://twitter.com/smtgpt/status/1817844272064012304?ref_src=twsrc%5Etfw">July 29, 2024</a>
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<p>Gupta’s perspective is that losses should be primarily absorbed by the company and not passed directly onto the customers. This view is shared by other industry leaders who believe that imposing a direct financial burden on users undermines trust in the crypto ecosystem. Furthermore, how the poll was presented to users has been described as manipulative, framing options in a way that seemingly protects the company’s interests first.</p> 
<h2 class="wp-block-heading" id="h-legal-and-financial-repercussions">Legal and Financial Repercussions</h2> 
<p>The method of compensating users has legal and financial ramifications. Converting assets into a basket of different tokens affects the users’ immediate liquidity and subjects them to potential tax liabilities. The Indian regulatory framework imposes a 1% tax Deduction at Source (TDS) and a 30% tax on capital gains, which could significantly impact the already strained financial situation of the affected users.</p> 
<p>Additionally, the timing and methodology of the snapshot used to determine the value of users’ po... </p>
<p>The post <a href="https://cryptonewsland.com/wazirx-faces-criticism-over-compensation-plan-after-hack/">WazirX Faces Criticism Over Compensation Plan After Hack</a> appeared first on <a href="https://cryptonewsland.com">Crypto News Land</a>.</p>

WazirX Faces Criticism Over Compensation Plan After Hack

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Crypto News Land

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