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The cyberattack occurred on 18th July. Why is the valuation of crypto assets based on the price from 21st July?
The valuation is based on the time when trading was paused, which was 21st July 2024, 8:30 PM IST. The valuation uses average prices from CoinMarketCap and select global exchanges to ensure fairness.
My portfolio shows my crypto assets in full, and nothing seems to be missing. Does this mean my crypto was not hacked?
The portfolio you see is based on data before we rebalanced it following the cyberattack. It will be updated according to the new valuation method once trading resumes to reflect any changes accurately.
Can you explain Option A and Option B in simple terms?
Option A lets you trade and HODL your crypto assets with priority for recovery efforts, but you won’t be able to withdraw your funds. If you want to start withdrawing your assets later, you can switch to Option B, though you’ll lose your priority in the recovery process.
Option B lets you trade and withdraw your assets, but recovery efforts will focus on those who chose Option A first. You can switch to Option A anytime before you make any trades or withdrawals.
If 100% of my tokens are in the ‘not stolen’ category, will I get all of them back?
Users with 100% of their tokens in the ‘not stolen’ category will receive 55% of those tokens back. The remaining 45% will be converted to USDT-equivalent tokens and locked. This is part of our fair and transparent socialized loss strategy to distribute the impact equitably. The deducted tokens are used for rebalancing other users’ portfolios who have more than 45% of stolen tokens in their portfolios.
What will happen if 100% of the tokens in my portfolio are stolen tokens?
If your entire portfolio (100%) consists of stolen tokens, we’ll create a balanced portfolio for your unlocked portion (55%) using a basket of crypto assets. This basket will be derived from the available assets on the platform.
If I hold only SHIB, will it automatically be converted to USDT, or do I need to sell and withdraw it?
SHIB is classified as a stolen token. Therefore, 45% of the value of your SHIB holdings as of 21st July 2024, 8:30 PM IST, will be converted to USDT-equivalent tokens and locked. The remaining 55% will be used to create a balanced portfolio with available crypto assets on the platform.
Why are you locking 45% of the value in USDT-equivalent tokens instead of locking it in the original form?
In a bear market, prices tend to be low, while in a bull market, they can be high, causing significant fluctuations in the value of cryptos. By locking 45% of the value in USDT-equivalent tokens, we ensure a stable amount for recovery planning.
What is a “Balanced Crypto Basket”?
A Balanced Crypto Basket is a mix of different cryptos combined to ensure that the portfolio remains stable and fair for users. This basket is created by considering the available crypto assets on the platform and ensuring that the distribution is balanced and equitable.
I voted for Option B, but now I need to switch to Option A, or vice versa. How do I proceed?
Once trading resumes, you can switch to Option B by agreeing to the condition that your locked tokens will be released only after all locked tokens of those who chose Option A have been released. Similarly, you can switch to Option A before making any trades or withdrawals on the platform.
What is a “Socialized Loss Strategy”?
A socialized loss strategy is a method where the losses from a situation, such as a cyberattack, are shared among all crypto portfolio users in a fair and equitable way. Instead of placing the full burden of the loss on a single individual, the impact is spread out to minimize the financial strain on any one person.
Historically, exchanges facing such situations (cyberattacks) have had two main options:
- Legal Proceedings: This involves taking legal action to recover losses, which can be a lengthy process. Legal fees can accumulate, and users may not receive compensation until the proceedings are concluded. The outcome often results in distributing whatever assets remain among users, similar to a socialized loss strategy.
- Socialize Loss & Rebuild: This approach first involves spreading the loss across all users, then focuses on rebuilding the business. This includes growing the business, finding new partners, and exploring new initiatives. This method typically allows for a faster recovery and gives the platform an opportunity to fill the gap using any future profits generated by the business, potential acquisitions, partnerships, etc, over and above the recovery of stolen assets and quicker return to normal operations.
In practice, exchanges like Bitfinex have used this strategy. For example, Bitfinex spread the loss by reducing all user balances by 36%, regardless of the types of assets held. This approach is proven to be effective in reopening platforms swiftly.
For WazirX:
Our approach involves a partial lock on the crypto portfolio balance while your INR wallet balance remains unaffected. This phased strategy allows us to provide access to a portion of your crypto assets while working on recovery, with the aim of reopening the platform as swiftly as possible. Our 55/45 approach balances immediate access to a portion of your assets with the potential for future recovery, offering a faster and more flexible solution compared to traditional methods.
We will regularly update this post with answers to user questions. For more details about this program, please refer to our announcement post, where many of your queries are likely to be addressed.
Thank you for your understanding and patience as we work through this process.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
