Binance’s rebuttal comes amid growing frustration over the stolen funds.
The stolen funds from the Indian crypto exchange WazirX are on the move once again. Since Monday, the hacker has transferred 15,000 ETH ETH $3 123 24h volatility: 1.0% Market cap: $378.60 B Vol. 24h: $17.56 B in three batches of 5,000 to the privacy service Tornado Cash. As of Thursday, the hacker’s wallet still contains over $50 million in various cryptocurrencies.
WazirX’s Ongoing Restructuring and Blame Game
The breach, which occurred in July, resulted in a significant loss for WazirX, with $100 million in Shiba Inu (SHIB) and $52 million in Ether (ETH) stolen. The incident has led to WazirX filing for restructuring as it deals with the fallout. During the restructuring, WazirX founder Nischal Shetty has shifted blame for the hack onto various parties, including custodian Liminal and crypto exchange Binance.
Shetty has suggested that Binance controlled a substantial portion of WazirX’s funds, which he claims has hindered the exchange’s ability to compensate affected users.
Binance Refutes Claims and Addresses Misleading Information
Binance, however, has strongly refuted these claims. In a recent blog post, Binance stated:
“The WazirX team and Nischal Shetty continue to mislead WazirX customers and the market regarding the relationship between WazirX and Binance.”
The statement emphasized that Binance has never owned, controlled, or operated WazirX, and criticized Shetty’s attempts to deflect responsibility. Binance’s rebuttal comes amid growing frustration as the stolen funds are moved to Tornado Cash. Tornado Cash, a privacy service, allows users to obscure their transaction history, making it a common tool for laundering stolen cryptocurrency. While the service itself is legal, its use by hackers to clean their digital footprints complicates efforts to track and recover stolen assets.
User Backlash and Future Plans
WazirX, which is now under restructuring due to the significant loss, has proposed a compensation plan for affected users. During a recent town hall hosted on YouTube, WazirX’s CEO, along with other executives, outlined a restructuring scheme. This plan includes compensating users on a pro-rata basis, where they face a 45% reduction in their total investment. The restructuring process includes the valuation of remaining assets and any recovered tokens, but notably excludes “ringfenced” tokens and restructuring profits.
The restructuring process has been criticized by users, who are frustrated by the management’s decision to exclude past profits from the compensation pool. Shetty reiterated that WazirX was sold in 2019 and that Zettai, the current operator, does not own the previous profits. This response has not quelled user dissatisfaction, with many feeling that the exchange should use its past earnings to aid affected customers.
The WazirX hack adds to a worrying trend of major crypto breaches. As WazirX deals with restructuring and criticism over compensation, this incident highlights the urgent need for improved security and accountability in the crypto industry.
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