In a dramatic shift following intense customer backlash, cryptocurrency exchange WazirX has decided to abandon its controversial plan to distribute 45% of losses from a recent $230 million hack among its users.
The decision comes after significant criticism and a public poll revealed widespread discontent with the proposed approach.
The hack, reportedly executed by North Korean cyber criminals, led to the theft of a substantial portion of WazirX’s user funds, equivalent to 45% of the total assets held on the exchange’s multisig wallets.
In response, WazirX co-founder Nischal Shetty initially proposed a “socialisation” plan where users would absorb part of the losses.
Under the proposed 55-45 plan, users would be able to access 55% of their portfolio tokens, while the remaining 45% would be converted into USDT-equivalent tokens and locked, potentially devaluing their portfolios.
WazirX also planned to replace any affected tokens with a mix of unaffected assets to mitigate the impact.
The plan faced immediate criticism from the crypto community, with figures such as CoinDCX co-founder Sumit Gupta labeling it as “utter nonsense.”
Customers also expressed concerns that the approach was inequitable, leading to a surge of discontent and a call for a more user-friendly resolution.
To address the situation, WazirX launched a poll on July 27 to gather feedback on the way forward.
The poll concluded on August 3, with the results seemingly influencing the company’s decision to rethink its strategy.
The exchange has since opted to “go slow” on the proposed loss-sharing model, opting for a more measured approach in response to the negative feedback.
In the wake of the hack, WazirX had also halted operations and withdrawals and announced a $23 million bounty program aimed at recovering the stolen assets.
The company’s shift away from the 55-45 plan reflects a broader effort to regain customer trust and stabilize its operations following the breach.
