A wave of discontent has surged among users of WazirX, India’s largest cryptocurrency exchange, following a massive $234.9 million (approx. Rupees 2000 crore) hack of its multi-sig wallet.
A group of aggrieved customers is now calling for a Central Bureau of Investigation (CBI) inquiry into the incident, suspecting potential insider involvement and demanding accountability from WazirX and its co-founder, Nischal Shetty.
The users have also approached the DCP South Zone of the Delhi Police, expressing dissatisfaction with WazirX’s response to the hack. They argue that the platform’s recent announcement, which proposes that customers bear 40% of the losses before any recovery or compensation process begins, needs to be more fair and adequate.
A Call for CBI Investigation
Furthermore, there is a call for greater transparency. The petition urges for a fair snapshot to be taken post-hack to ensure equitable treatment of traders who held INR during the hack but bought assets later.
Inadequate Response from WazirX
The hacked platform’s response has been widely criticized. Instead of taking full responsibility, WazirX has only unlocked 55% of user funds, leaving the remaining losses to be absorbed by the users. This has raised significant concerns among the community, who feel that WazirX should cover the financial shortfall from their reserves.
Manipulative Practices and Insider Trading Allegations
Several critical issues have been highlighted in the users’ petition. One of the major concerns is WazirX’s perceived manipulative and unfair practices. The platform has been accused of running misleading polls that could unknowingly lead users to waive their legal claims and agree to unfavorable terms.
Moreover, there are allegations of insider trading. Post-hack, it is believed that WazirX insiders concerted their crypto assets to INR, thereby avoiding losses and positioning themselves to profit from the situation. Such unethical behavior is seen as a betrayal of customer trust and calls for immediate investigation.
Misleading Deposits and Forced Asset Redistribution
Even after the hack, WazirX continued to accept INR deposits, misleading investors into thinking they could benefit from the market dip. These deposits are now locked, further worsening the financial strain on users who believed they were making prudent investments.
Adding to the users’ woes, WazirX plans to convert 45% of user assets to USDT, creating potential tax liabilities without clear guidance on who will bear these costs. This forced conversion is seen as an additional financial burden on already impacted users.
Coercion and Lack of Transparency
Furthermore, there is a call for greater transparency. The petition urges for a fair snapshot to be taken post-hack to ensure equitable treatment of traders who held INR during the hack but bought assets later.
Demand for Justice
The collective demand from WazirX users is clear: a comprehensive criminal investigation into the platform’s actions and justice for all affected users. They seek accountability from WazirX and Mr. Shetty and insist on fair compensation for their losses.
This incident has not only highlighted the vulnerabilities within cryptocurrency exchanges but also underscored the need for greater transparency, accountability, and user protection in the rapidly evolving world of digital finance.
Rival Potshots
Sumit Gupta, co-founder of CoinDCX, another India based rival crypto exchange, took to X (formerly Twitter) to criticize the loss compensation policy announced by WazirX. He termed the policy of customers bearing 45% losses as “utter nonsense.”
As the demand for a CBI inquiry gains momentum, the eyes of the cryptocurrency community are firmly fixed on the outcome, hoping for a resolution that upholds the integrity and trust essential for the growth of the industry
