DailyPost 2865
WAZIRX’s ‘SOCIALISE’ SECURITY BREACH STRATEGY
As is often repeated “Getting hacked is the new normal,” ways and means have to be found to mitigate it. While the cyber security measures need to be improved upon on a consistent basis, there is no compensatory mechanism for a hack, mostly its data and real value cannot be calculated even with the best of efforts. The worst damage cannot be calculated either. The response by a cryptocurrency exchange to a cyber attack is making waves. Simple fact of the case is that on July 18, WazirX, a cryptocurrency exchange was hit by a cyber attack that led to the loss of over 45% of its digital assets.
Financial mitigation of a cyber attack has barely been heard and it is here that the response of WazirX is being found to be drastically different. It is also being termed as a controversial move. WazirX has announced plans to “socialise” the $230 million loss from its recent security breach among all its customers. We all are aware of the “force majeure” clause in our agreements, in the world of cyber attacks, this is also characterised in that category. This happens to be not only the biggest breach of a cryptocurrency firm in India but is also among world’s top hacks.
A company is worth its response in a crisis and this is where WazirX takes the cake. The company has decided to resume operations within a week. They have also outlined the strategy. This is by way of implementing a “fair and transparent socialised loss strategy” with an intention to distribute the impact “equitably” among its user base. The breach resulted in the theft of over 200 cryptocurrencies. The bulk of the losses concentrated in mostly popular tokens including Shiba Inu (SHIB), Ethereum, Polygon’s MATIC and the meme cryptocurrency Pepe.
The blockchain data analysis was provided by third-party explorer Lookchain. As per the WazirX equitable mechanism it will “rebalance” the customer portfolios on its platform. It would return only 55% of the holdings, while locking the remaining 45% in USDT-equivalent tokens. This would impact customers who have not been directly affected by the breach. To make it simple to comprehend for all, the company states that “users with 100% of the tokens in the ‘non stolen’ category will receive 55% of those tokens back. Undeniably, it is a great idea of suffering the losses together, how far it would find favour with the customer base needs to be seen.
HACKS WILL FORCE US TO FIND INNOVATIVE SOLUTIONS FOR ITS FINANCIAL REMEDIATION.
Sanjay Sahay
Have a nice evening.