Key Points
- CoinSwitch launches a $69.9 million recovery fund called “CoinSwitch Cares” to compensate victims of the WazirX hack.
- The initiative aims to rebuild trust in the Indian crypto market and attract new users.
CoinSwitch, a top-tier crypto exchange in India, has initiated a recovery fund named “CoinSwitch Cares” to make up for the losses resulting from the WazirX hack. The fund, which amounts to 600 crore rupees or roughly $69.9 million, aims to restore confidence and provide a fresh start for the users impacted.
Relief for WazirX Victims
WazirX, one of the largest crypto exchanges in India, fell victim to a significant cyberattack last year, resulting in the loss of $235 million in crypto assets. This incident caused great distress among users who found themselves unable to access their assets due to suspended withdrawals.
The breach, which stirred up a storm in the crypto community, was attributed to WazirX’s custody provider, Liminal. According to Liminal, the exchange’s use of compromised devices was the root cause of the incident.
In the midst of this crisis, CoinSwitch identified an opportunity to intervene and transform the situation into a catalyst for recovery and growth. Through their announcement of providing financial aid over the next two years, CoinSwitch has reignited hope among those affected by the hack.
Users can apply for compensation by providing evidence of their losses, including WazirX loss statements and any other requested documentation. The intent is to rebuild the community and restore faith in India’s crypto market. Although CoinSwitch does not currently support direct crypto withdrawals, users can sell their crypto and withdraw in rupees. CoinSwitch also offers incentives such as sign-up bonuses, revenue sharing, and referral rewards to encourage participation.
Building a Stronger Community
This initiative is not only designed to help existing users but also to attract new ones, with the ultimate goal of building a stronger community. CoinSwitch is financing this recovery effort from its own reserves, demonstrating its long-term commitment to supporting its users and thriving in India’s volatile crypto market.
Since its inception in 2017, CoinSwitch has rapidly grown to become one of the largest crypto exchanges in India, boasting over 20 million users. With backing from prominent investors like Andreessen Horowitz, Tiger Global, and Coinbase Ventures, CoinSwitch is in a robust financial position.
Several other crypto platforms have taken similar measures to assist users following security breaches. For example, Binance established a Secure Asset Fund for Users (SAFU) to cover $40 million in Bitcoin losses from the 2019 hacks. KuCoin utilized its reserves to reimburse users after a severe hack in 2020, and BitMart followed suit after a breach in 2021. Crypto.com also refunded users affected by a 2022 security issue while bolstering its firewalls.
Such initiatives foster trust by ensuring that users are protected from associated losses.
