CoinSwitch CEO Ashish Singhal announced on Tuesday a recovery program for WazirX users. The program aims to help them recover their losses from the alleged July 2024 cyber attack.
However, the cryptocurrency community was quick to point out that this „recovery program” serves primarily as a user acquisition strategy. In a post on X, Singhal stated that the program aims to provide users with „the opportunity to recover losses, but also to ensure the development of the Indian cryptocurrency community.”
In essence, CoinSwitch is encouraging WazirX users to switch to its platform. It currently offers incentives to help users recover some of their losses through rewards. However, it does not provide direct compensation for hacking.
In July, hackers infiltrated WazirX to steal some $234 million in cryptoassets. They exploited a vulnerability in the exchange’s multisig wallet system, which required three out of six signatures to approve transactions.
In August, CoinSwitch initiated legal proceedings against the exchange to recover more than $9 million in blocked funds.
CoinSwitch’s reward system prompts users to assess their losses and create an account on the platform. They are then encouraged to deposit funds and transfer assets from WazirX as soon as they become available. Instead of offering direct compensation for lost cryptocurrencies, the program provides rewards to encourage the transition.
The „CoinSwitch Cares” initiative includes various incentives tailored to WazirX users. First, Signup Rewards allows participants to earn up to 10% of 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. In addition, Referral Rewards provides an additional benefit. Users can earn up to 5% on deposits made by new users they have referred from WazirX.
User X criticized CoinSwitch for this initiative, saying that its program appears to be more of a marketing tactic than a true recovery initiative. In addition, he noted that it comes into effect only after WazirX authorizes withdrawals, after which users must transfer their funds to CoinSwitch to access the recovery benefits.
