CoinDCX CEO Criticizes WazirX Hack Compensation Plan

WazirX Faces Backlash Over Hack Compensation Options

After the WazirX hack, CoinDCX CEO Sumit Gupta has publicly criticized the exchange’s intended compensation plan. The plan which is intended to compensate users for the hack has been described as “utter nonsense” by Gupta and there is increasing displeasure in the crypto community regarding WazirX’s response to the issue. 

What's the News

WazirX, an Indian crypto exchange has recently suffered a significant hack that resulted in the theft of 45% of user assets. In response, WazirX proposed a compensation plan to the users and allowed them to regain their lost funds through two choices. However, this plan has not been well received especially by Sumit Gupta the CEO of CoinDCX.

The compensation plan includes a poll with two choices for affected users:

1. Access 55% of Funds Without Withdrawals:  Users can access 55% of their portfolio without immediate withdrawal capabilities. The remaining 45% will be converted into Tether (USDT) or other available tokens, with priority given to these users for any potential recovery proceeds.

2. Access 55% of Funds With Withdrawals:  Users can access and withdraw 55% of their portfolio, with the remaining funds converted into USDT or other tokens. However, these users will have second priority for any potential recovery proceeds.

The snapshot for valuing user portfolios was taken on July 21, three days after the hack. This is considered unfair by critics because deposits and trading went on even after withdrawals were stopped on July 18, resulting in illegal trading and panic selling. 

What CoinDCX CEO Says About WazirX Hack Compensation Plan?

WazirX’s reaction to the hack has not set well with Sumit Gupta, the CEO of CoinDCX who has expressed his displeasure. He continues to explain that the exchange’s approach to dealing with the situation is more of a business self-serving than a customer-serving one. “Hate to be saying this, but the way WazirX is handling this entire situation isn’t community-first,” Gupta stated.

Gupta emphasized that the company should absorb the losses using its assets rather than passing them directly onto customers. He described the compensation plan as "utter nonsense," criticizing the poll options as being framed to protect the business first, not the customers. Gupta's comments underscore the need for a community-first approach in such critical situations.

Despite his criticism, Gupta expressed hope that WazirX would reconsider its approach and prioritize customer welfare. He also noted that such problems as the crypto tax consequences of forced token swaps are still open, which creates additional worries for the users. 

Conclusion

The hack of WazirX has attracted a lot of controversy and the proposed compensation plan has received a lot of backlash from the users and other CEOs in the industry like Sumit Gupta of CoinDCX. The perceived lack of preparation in the plan, combined with the uncertainty of the future, shows that there is a need to shift the focus on how to deal with the aftermath of such events towards the community. Thus, the crypto community waits for the new information and the outcome of the poll by 3rd August 2024 and still expects a more suitable decision for the users.

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