Will WazirX’s recovery plan restore confidence in CEXs?

• WazirX has plans to restore user balances after a $230M hack, reversing trades for fairness.
• The hack exposed vulnerabilities in WazirX’s multisig wallet, shaking confidence in the platform.

Following a significant security breach in July 2024, where hackers made off with over $230 million in digital assets, WazirX has announced a major recovery effort.

The Indian cryptocurrency exchange plans to restore account balances and reverse all trades executed after the platform halted withdrawals on the 18th of July.

WazirX’s road to recovery

This move, announced on the 8th of August, aims to stabilize the platform and regain user trust after the devastating hack.

Taking to X, the platform noted, 

“All users will have their portfolio balances on the WazirX platform restored to what they were on July 18, 2024.”

They further added, 

“This restoration will be carried out over the next few days, and affected users will receive an email notifying them of any affected trades.” 

This highlights that the exchange is focused on ensuring an equitable outcome for all users affected by the breach.

Steps taken by the team

To achieve this, WazirX will cancel all trades conducted between the 18th and the 21st of July, effectively nullifying any transactions made after the withdrawal suspension on the 18th of July at 07:30 am UTC.

Appreciating the efforts by the team, crypto educator and influencer platform Wise Advice noted, 

“Great step by team.” 

Adding to the fray was another crypto influencer, Zia ul Haque who said, 

“Good step by WazirX. But please do return the full fund to the users without affecting other users.”

To further assist users, WazirX has also published a comprehensive FAQ list, providing detailed information and guidance regarding the announced plan.

What happened so far?

For those unaware, the WazirX hack, which resulted in the theft of $152 million in Shiba Inu [SHIB] and Ethereum [ETH], impacted 45% of the exchange’s reserves.

The breach involved a multisignature wallet and exposed vulnerabilities in WazirX’s coordination with its custody provider, Liminal.

Conflicting reports between the two parties complicated the situation.

This incident exposed the risks of storing large digital assets on exchanges and raised concerns about user fund security.

That being said, WazirX is actively working to restore balances and reverse trades to rebuild trust and restore confidence in the platform.