WazirX Shifts the Blame to Users after $234 Million Cyber Attack, SHIB Army Questions Exchange's Integrity

The most popular Indian crypto exchange, WazirX, saw a staggering cyber attack on July 18, 2024, that resulted in $234 million drained.

Indian crypto exchange giant WazirX suffered a cyber attack on July 18, 2024, leading to SHIB being among the top three digital assets in terms of demand in the country. In the wake of the attack, fraudsters dumped a massive 5.43T SHIB tokens, amounting to around $90 million.

A week after the hack, WazirX staff announced a contentious “socialized loss” reimbursement plan. According to the explanatory message, 45% of all WazirX’s customer funds were stolen during the hack. Hence, the crypto exchange decided to “distribute the impact across all users equitably.”

For instance, if a user on the Indian exchange holds only SHIB, there will be an entirely new crypto basket with miscellaneous assets chosen by WazirX. Out of the unlocked crypto assets, 55% will be replaced with other tokens to match the market value.

The other 45% of a customer’s crypto assets will remain in the locked supply and be converted to USDT-equivalent digital assets. However, it bears mentioning that SHIB is classified as a ‘stolen token’; hence, holders who have kept SHIB solely on WazirX will have their whole portfolio replaced.

Naturally, this awkward crypto asset rebalance plan saw immense backlash on X. SHIB holders, including popular crypto influencers, called out WazirX for not taking any ownership for their failure to keep their customers’ assets safe.

“First time i am seeing that other customers are responsible for the loss of other customers but the ones collecting all the trading fees arent even responsible …This norm will be followed by another CEX and other CEX shouldnt allowed this . Trust is important.”

WazirX’s recovery plan operates on the prices right before the trading was halted on 21st July 2024, 8:30 PM IST. Despite collecting trading fees and providing crypto services to tens of millions of Indian customers, WazirX shifts the blame for the security breach collectively to the same users that the exchange has let down.

As a result, multiple SHIB community members are chanting, “Not your keys, not your crypto!” as a mantra. Others treat the situation as a reminder that centralized exchanges (CEXs) are highly dependent on the parenting company: “This sucks but it should be a reminder to everyone that you should move your tokens to a cold wallet,” utters Wookie Mind Trix.

Notably, the sentiment is shared among crypto enthusiasts, as some are seeing an untouched, outdated balance on-site. However, WazirX explained that “the portfolio you see is based on data before we rebalanced it following the cyberattack” and that it will change after the new valuation method is implemented once trading resumes.

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