- WazirX’s legal representatives have admitted it is extremely unlikely to fully compensate customers after the July hack
- The exchange has lost $230 million in the hack, with an estimated 55-57% recovery expected
- WazirX has acknowledged it cannot afford to fulfill its earlier promise of fully compensating customers
The legal representatives of Indian exchange WazirX have admitted that the exchange is extremely unlikely to make its customers whole following the debilitating hack that took place in July. WazirX lost $230 million in a July hack, and George Gwee, a director at restructuring experts Kroll, stated in a call with journalists that a return of 55-57% is much more likely. WazirX said last month that it was planning to make customers whole, but it seems that the company cannot afford to keep this promise.
Half the Platform’s Funds Lost
The loss of $230 million represented nearly half of the platform’s reserves, with the funds stolen from a Multi-Signature (MultiSig) wallet managed by third-party custody service provider Liminal.
A week and a half after the hack, WazirX co-founder Nischal Shetty noted that recovering such a large amount could take a long time and offered an instant 45% repayment instead.
This resulted in uproar, with customers complaining that they were being made to pay for the exchange’s poor security.
Customers on a Rollercoaster
Shetty relented and said that balances would be returned to pre-hack status, but this, too, is now in doubt. Shetty and Gwee joined a conference call with journalists on Monday in which Kroll managing director Jason Kardachi said the figures could change if a ‘white knight’ steps in or if the funds are recovered:
In crypto terms, it’s extremely unlikely that we can make people whole. So, whatever profits we generate or contributions from white knights or third parties can help improve the recovery in crypto terms. But I don’t think it’s realistic to think that we could ever make people whole when half or thereabouts of the crypto has suffered from the cyber attack.
Of course, the WazirX customers are the ones bearing the brunt, having gone on a rollercoaster of emotion since the hack in July, with their expectations of full payouts having been dampened, raised, and then dampened again.
