Sumit Gupta, the founder of CoinDCX, recently took to X(Twitter) to criticize WazirX’s response to a major security breach. WazirX, one of India’s leading cryptocurrency exchanges, suffered a significant security breach resulting in a loss of over $230 million. This incident marks the largest of its kind in India and has led to intense scrutiny of security measures within the crypto ecosystem.
Gupta’s Disappointment over WazirX’s Recovery Steps
“Hate to be saying this, but the way WazirX India is handling this entire situation isn’t community first and this IMO won’t go down well for them,” he stated. He emphasized that the first contribution to losses should come from the company and its assets, not directly from customers.
Gupta expressed disappointment over WazirX’s approach of making customers absorb 45% of the losses, calling it “utter nonsense.” He insisted that WazirX re-evaluate its strategy and accept accountability for the losses, emphasising that safeguarding clients ought to come first.
To manage the leftover user assets, WazirX has provided two solutions. Depending on the option the users choose, 55% of the user’s crypto assets will be traded and/or withdrawable, while the remaining 45% will be frozen and converted to USDT-equivalent tokens.
For both options, they’ll use a basket of cryptocurrency assets drawn from the available cryptocurrency assets on the site to establish a balanced portfolio for your unlocked portion (55%) of the investment.
WazirX will balance users’ unlocked portfolio if the affected tokens make up 55% of it. The affected tokens will be swapped out for a variety of unaffected crypto assets that are available on the platform.
Crypto Community in India taken aback by the Hack
Exchanges have increased security and transparency as a result of the WazirX event, which has caused investor faith in the Indian cryptocurrency sector to be affected. It is believed that long-term tactics like stringent regulatory compliance, transparency, and strong security standards are crucial for re-establishing market stability and confidence.
Sumit Gupta also highlighted the stringent security measures adopted by CoinDCX to prevent such incidents. He outlined the company’s use of cold wallets for storing customer funds and advanced security technologies like sophisticated encryption techniques, Two-Factor Authentication (2FA), and Multi-Party Computation (MPC).
Gupta mentioned CoinDCX’s ISO 27001 accreditation as evidence of their commitment to maintaining high-security standards. He emphasised in his video how important it is for the cryptocurrency ecosystem to put client security and protection first.
What is WazirX Doing?
Apart from the solutions mentioned above, WazirX also launched a bounty reward. It offers the Track & Freeze Bounty offers rewards of up to $10,000 worth of USDT for actionable intelligence leading to the freezing of the stolen funds. The second initiative promises 10% of the recovered money as a white hat incentive, awarded only if the stolen funds are successfully recovered.
The cryptocurrency community is currently awaiting WazirX’s response to the criticisms and if they intend to take any measures to better align their business practices with those of their clients.
Lessons from this compromise will probably influence future security and regulatory policies in the Indian crypto sector as it develops further.