- Recent developments have sparked controversy in the crypto community as WazirX proposes a compensation plan post-hack.
- The compensation strategy has received significant backlash from users and industry professionals alike.
- CoinDCX CEO Sumit Gupta has publicly criticized WazirX’s approach, emphasizing a need for a community-focused resolution.
In light of the WazirX hack, CoinDCX CEO voices strong opposition to the exchange’s compensation plan, calling for a more community-centric approach.
CoinDCX CEO Criticizes WazirX Hack Compensation Plan
Sumit Gupta, CEO of CoinDCX, has voiced substantial criticisms regarding the recently proposed compensation plan from WazirX, following a major hack. The plan, which was introduced through a poll for affected users, has been viewed as inadequate and inconsiderate towards user interests, prompting widespread discontent within the crypto sector.
Community Reactions and Gupta’s Critique
Gupta’s disapproval centers on the notion that WazirX’s compensation options prioritize corporate interests over user well-being. He expressed that the losses from the hack should be absorbed by the exchange rather than being transferred to the users. Moreover, he labeled the proposed compensation as ineffective, pointing out that the poll choices seem strategically designed to protect the exchange’s business interests first.
Details of the Compensation Plan: User Options
The poll provided by WazirX offers two main options for users:
- Access 55% of Funds Without Withdrawals: Users retain 55% of their portfolio value without immediate withdrawal rights. The remaining 45% will be converted into USDT or other tokens, with these users receiving priority in any future recovery.
- Access 55% of Funds With Withdrawals: Users can withdraw 55% of their portfolio value, while the remaining balance, converted to USDT or other tokens, ensures these users have a secondary claim on any recovery proceeds.
Both options have been criticized for their inherent limitations and the unfavorable conditions imposed during the valuation snapshot.
Implications and Tax Concerns
The valuation of user portfolios, based on a snapshot from July 21, has itself been contentious. Critics argue that the timing—three days post-hack—left users with portfolios undervalued due to ongoing trading and deposit activities after the exchange had halted withdrawals. Additionally, the compensatory conversion into a balanced cryptocurrency basket incurs a 1% Tax Deducted at Source (TDS) along with potential 30% capital gains tax implications, further burdening users financially.
WazirX’s Next Steps and Community Expectations
Despite the backlash, Sumit Gupta remains hopeful that WazirX will reconsider its approach. He calls for a resolution where the exchange absorbs the losses instead of placing the financial strain on its users. With the deadline for the compensation poll fast approaching, users are awaiting further clarification and potential improvements in WazirX’s compensation plan and its execution.
Conclusion
The WazirX hack and resulting compensation plan have highlighted significant issues around user protection and corporate responsibility in the crypto industry. CEO Sumit Gupta’s criticism underscores the need for a more user-centric approach to crisis management and restitution. As the situation evolves, the crypto community is eagerly looking for fair and effective solutions that prioritize user interests and foster trust within the ecosystem.
