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The cyber attack took place on July 18. Why is crypto asset valuation based on July 21 price?
Valuation is based on trading cut off time of 21 July 2024 at 20:30 IST. The valuation uses average prices from CoinMarketCap and selects global exchanges to ensure fairness.
My portfolio fully shows my crypto assets and nothing seems to be missing. Does this mean my crypto is not hacked?
The portfolio you see is based on the data before it was rebalanced after the cyber attack. It will be updated according to the new valuation method when trading resumes to accurately reflect any changes.
Can you explain option A and B in simple terms?
Option A allows you to trade and lock your crypto assets, prioritizing recovery efforts, but you will not be able to withdraw your funds. If you want to start withdrawing your assets later, you can switch to option B, although you will lose your priority during the recovery process.
Option B allows you to trade and withdraw your assets, but recovery efforts will focus on those who chose Option A first. You can switch to option A at any time before making any trades or withdrawals.
If 100% of my tokens are in the “not stolen” category, will I get them all back?
Users with 100% of their tokens in the “Not Stolen” category will get 55% of those tokens back. The remaining 45% will be converted into USDT equivalent tokens and locked up. This is part of our fair and transparent social loss strategy to distribute the impact fairly. The reduced tokens are used to balance the portfolios of other users who have more than 45% of the stolen tokens in their portfolios.
What if 100% of my portfolio is stolen tokens?
If your entire portfolio (100%) consists of stolen tokens, we will create a balanced portfolio for your unlocked portion (55%) using a basket of crypto assets. This basket will be derived from the assets available on the platform.
If I only hold SHIB, will it automatically convert to USDT or do I have to sell and withdraw it?
SHIB is classified as a stolen token. Therefore, as of July 21, 2024, 20:30 IST, 45% of the value of your SHIB holdings will be converted into USDT equivalent tokens and locked. The remaining 55% will be used to create a balanced portfolio of crypto assets available on the platform.
Why are you locking 45% of the value in USDT equivalent tokens instead of locking in the original way?
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 provide stable money 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 taking into account the crypto assets available on the platform and ensuring that the distribution is balanced and fair.
I voted for option B, but now I have to switch to option A, or vice versa. How do I proceed?
When trading resumes, you can switch to Option B, agreeing to the condition that your locked tokens will only be released after all the locked tokens of those who chose Option A have been released. Likewise, you can switch to Option A before making any trades or withdrawals on the platform.
What is a “Social Loss Strategy”?
A socialized loss strategy is a method where losses from a situation such as a cyber attack are distributed among all users of a crypto portfolio in a fair and equitable manner. Instead of placing the entire burden of the loss on one person, the impact is spread across each person to minimize financial pressure.
Historically, exchanges facing such situations (cyber attacks) have had two main options.
- Legal proceedingsThis involves taking legal action to recover losses, which can be a lengthy process. Legal fees may accrue and users may not receive compensation until the proceedings are concluded. The result often leads to a distribution of remaining assets among users, similar to a social loss strategy.
- Socializing loss and rebuildingThis approach first involves spreading the losses to all users and then focuses on business recovery. This includes growing the business, finding new partners and exploring new initiatives. This method typically allows for faster recovery and enables the platform to fill the gap using future profits generated by the business, potential acquisitions, partnerships, etc., in addition to recovering stolen assets and returning to normal operations more quickly.
In practice, exchanges like Bitfinex have used this strategy. For example, Bitfinex spread the loss, reducing all user balances by 36%, regardless of the types of assets held. This approach has been proven to be effective in quickly reopening platforms.
For WazirX.
Our approach involves partially locking the crypto portfolio balance while your INR wallet balance remains unchanged. This phased strategy allows us to provide access to a portion of your crypto assets while we work on recovery, with the goal of reopening the platform as quickly 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’ll update this post regularly with answers to user questions. For more details about this program, please refer to our announcement post, where many of your queries will likely be addressed.
Thank you for your understanding and patience while we work through this process.
Disclaimer: Cryptocurrency is not legal tender and is currently unregulated. Please ensure that you carry out a sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information presented in this section does not represent any investment advice or the official position of WazirX. WazirX reserves the right, at its sole discretion, to modify or amend this blog post at any time and for any reason without prior notice.
