Coindcx CEO Criticizes Wazirx’s Handling of Cyberattack Losses

In recent weeks, the Indian cryptocurrency exchange Wazirx has faced scrutiny following a major cyberattack that led to the theft of approximately $230 million, nearly 45% of user funds. 

The attack has prompted a heated response from the crypto community, notably from Sumit Gupta, the CEO of rival exchange Coindcx. Gupta has openly criticized Wazirx’s handling of the situation, particularly its decision to pass on a substantial portion of the losses to its customers.

The controversy centers around Wazirx’s strategy to manage the impact of the cyberattack. The exchange announced a “socialized loss strategy,” aiming to distribute the financial burden equally among all users. 

This approach, dubbed the 55/45 model, intends to balance the losses between the company and its users. However, Gupta has vehemently opposed this strategy, arguing that it unfairly shifts the financial burden onto users.

Besides his criticism of Wazirx’s loss-sharing model, Gupta has raised concerns about the company’s commitment to its customers. He argues that the initial response to the cyberattack should involve contributions from the company’s own resources, including its treasury and assets. He believes that making customers absorb such significant losses is both unjust and damaging to the broader crypto ecosystem.

Consequently, Gupta’s critique highlights a growing tension within the crypto community. The handling of cyberattack losses can significantly impact an exchange’s reputation and customer trust. Wazirx, meanwhile, is working diligently to recover from the attack. 

The platform is actively pursuing recovery options, including a $23 million bounty program aimed at locating the stolen assets. Additionally, Wazirx has launched a poll to involve users in decisions about the platform’s reopening, reflecting its ongoing efforts to engage with its user base.

Moreover, Wazirx has been transparent in its communications, providing daily updates about the recovery process. The exchange assures users that their INR funds remain secure and that there is no evidence of compromise in the signers’ machines. 

Despite these efforts, the backlash from the community continues to grow, as many believe that Wazirx’s approach prioritizes business interests over customer welfare.