Users cry foul as WazirX’s socialised loss response to $235mn hack comes under fire

On July 18, crypto exchange WazirX reported that one of its multisig wallets—the equivalent of a bank’s vault, which requires multiple passkeys to access—on the Ethereum network had faced a security breach. Hackers made away with crypto assets, which included $100 million Shiba Inu, $52 million ether, and $11 million Polygon tokens, among others. The total loss of $234.9 million accounted for nearly 45% of the exchange’s total assets.

In response, WazirX announced a $23 million White Hat bounty to trace and recover the stolen funds. Offering bounties is a common practice in the crypto community to incentivise ethical hackers—also known as white hats—to identify vulnerabilities and help recover stolen assets. One of the earliest examples of this was the Mt. Gox hack in 2014, where bounties were offered to track down the missing crypto tokens and improve security measures.

WazirX also barred crypto and fiat withdrawals on the platform, meaning the remaining 55% of assets on its platform are still locked up, with owners having no access to them until the embargo is lifted.