The Indian crypto exchange, WazirX is at the center of a major community backlash following the hack it suffered in July 2024.
The hack resulted in the theft of approximately $230 million from one of its multisignature wallets. While the event raised serious questions about the exchange’s security measures, its post-attack handling of the crisis has raised fresh concerns.
Several Indian crypto users are waiting for an appropriate response from WazirX regarding various questions. Many of them are unable to access their funds as the exchange has halted withdrawals.
With no proper response from the team, the community is here with 15 critical questions that co-founder Nischal Shetty and the exchange must address to rebuild trust with Indian crypto traders.
The community wants WazirX to provide clarity about the hack
The first set of questions are around the details of the hack and the accuracy of WazirX’s reporting:
- WazirX initially reported that 42% of crypto was hacked. But it was later changed to 45%. What is the reason for this discrepancy?
- The exchange recently revised its total crypto holdings on the day of the hack from $570 million to $546 million, citing a mistake. Can the exchange provide a detailed explanation for this major adjustment?
Several questions address WazirX’s handling of remaining funds and its compensation strategy:
- Why has WazirX allocated Rs 100 crore ($11.9 million) from user funds for legal expenses. Why is there zero contribution from management?
- With the 55/45 compensation strategy and additional deductions, what percentage of funds can users expect to recover?
- Will the distribution of remaining crypto be based on the INR value at the time of the hack, or on the basis of crypto tokens users held?
Concerns about post-hack operations and user treatment
The following questions focus on WazirX’s actions following the hack:
- Why were funds frozen for users who deposited INR after the hack?
- If crypto prices pump before distribution, will users benefit from this increase?
- In the interest of transparency, will Zattai (WazirX’s parent company) publish its financials for the last three years?
The final set of questions addresses concerns about transparency and communication with users:
- Why were some crypto holdings not tracked on Coingabbar? Also, why was this information not disclosed in previous POR reports?
- Why did WazirX initially disable only withdrawals and live POR after the hack? Why did they keep deposits and trading open?
- Why did the exchange send emails to users who didn’t support the moratorium, claiming they had supported it?
- Why did WazirX fail to update its terms and conditions to disclose that Zettai was managing user crypto?
- What is WazirX’s plan for returning funds to users who deposited after the hack?
- Why has the exchange disabled comments on its official X account and Nischal Shetty’s personal account?
- What is stopping WazirX from compensating users from the profits the company has made?
As long as the exchange fails to address these key issues, the frustration and anger of the users can only escalate. This in turn is not great for the reputation and image of the crypto exchange.
The answers to these questions will be crucial for the exchange to rebuild trust with the Indian crypto trading community.