Crypto News: The country’s largest crypto exchange WazirX is facing a hacker attack. WazirX has sought help from its former partner Binance to help customers affected by the $230 million cyber attack. Moneycontrol has been informed by quoting sources. Sources said that Binance has control over WazirX’s revenue and a surplus of its WRX tokens. On July 18, the day the hackers attacked, Binance had WRX tokens worth $80 million. Due to this, WazirX is not able to use its own funds to return some part of the assets of the customers who were stolen.
How did Binance get control of WazirX funds?
WazirX revealed in a blog post in May 2023 that Binance controls the WRX token. The IEO (Initial Exchange Offering) of WRX was launched by Binance and the 1,08,401 BNB tokens worth $2 million were received by Binance. Wallets holdings are locked and Binance has control over the WRX tokens issued. However, Binance, the world’s largest crypto exchange, has no control over WazirX, the country’s largest crypto exchange.
This came to light when in August 2022, the ED froze WazirX’s bank assets worth Rs 64.67 crore. The ED took this action in a case related to money laundering and fraud through loan apps. After this, Binance CEO Changpeng Zhao wrote on Twitter (at that time) that his company has no equity holding in WazirX and no control over its business. This surprised investors because in the blog posted by Binance on November 21, 2019, it was said that WazirX has been bought by Binance.
What is the recovery plan?
Nearly 10 days have passed since the hacking. WazirX is still trying to minimize the impact of the theft and restart the platform. Withdrawals and trading are currently temporarily blocked on WazirX. Nearly 33 percent of crypto users in the country have accounts with WazirX and about 45 percent of their assets have disappeared in the hackers’ attack. WazirX is now offering a 55/45 solution under which customers will get access to only about 55 percent of their portfolio and the remaining 45 percent of assets will be converted into stablecoin (USDT) and locked.
This rule will apply to all customers, regardless of how many assets have been stolen or how many types of tokens they have in their portfolio. Another option WazirX has put forward is to share the losses. Voting will be held on both these options by August 3. However, users are calling it unfair because converting 45 percent of tokens into stablecoins will reduce the value of their overall crypto portfolio.