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Crypto Reporter
Shalini Nagarajan
Crypto Reporter
Shalini Nagarajan
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CoinSwitch CEO Ashish Singhal on Tuesday announced a recovery program for WazirX users. The program aims to help them recover losses from the alleged July 2024 cyberattack.
However, the crypto community quickly pointed out that this “recovery program” primarily serves as a user acquisition strategy.
In an X post, Singhal stated that the program is designed to provide users “an opportunity to recoup losses but also ensure growth of the Indian crypto community.”
Essentially, CoinSwitch is encouraging WazirX users to switch to its platform. It is now offering incentives that help users recover part of their losses through rewards. However, it does not provide direct compensation for the hack.
Back in July, hackers infiltrated WazirX to steal about $234m in crypto assets. They exploited a flaw in the exchange’s multisig wallet system, which required three out of six signatures to approve transactions.
By August, CoinSwitch initiated legal proceedings against the exchange to retrieve more than $9m in locked funds.
CoinSwitch Introduces Reward-Based Recovery Initiative for WazirX Users Post-Cyberattack
CoinSwitch’s reward system prompts users to estimate their losses and create an account on the platform. They are then encouraged to deposit funds and transfer assets from WazirX once available. Rather than offering direct compensation for lost crypto, the program provides rewards to incentivize switching.
The “CoinSwitch Cares” initiative includes various incentives tailored for WazirX users. First, the Signup Rewards allow participants to earn up to 10% of their deposited funds over a two-year period.
CoinSwitch also offers a Revenue Redistribution plan. It allocates a portion of its trading revenue to users based on their reported losses. Additionally, the Referral Rewards provide an extra benefit. Users can earn up to 5% on deposits made by new users they refer from WazirX.
Users Accuse CoinSwitch of Exploiting WazirX Hack for Marketing Gains
An X user called out CoinSwitch for the initiative, saying its program appears to be more of a marketing tactic than a true recovery initiative. She further pointed out that it only takes effect once WazirX allows withdrawals, after which users are required to transfer their funds to CoinSwitch to access the recovery benefits.
Meanwhile, a WazirX user took to X to challenge CoinSwitch, raising doubts about the accuracy of the loss estimates, especially given the trust issues stemming from the WazirX hack.
Focusing on the reward specifics, he asked for clarity on how the 10% signup reward, spread over two years, would be calculated and whether it would meaningfully offset their losses or merely offer a small consolation.
