On January 7, 2025, cryptocurrency investment platform CoinSwitch announced the launch of a ₹600-crore recovery initiative, 'CoinSwitch Cares,' aimed at assisting users impacted by the WazirX hack that occurred in July 2024. This comprehensive program is designed to provide financial aid and support to victims of the hack, which resulted in a staggering loss of $230 million, nearly 45% of WazirX's crypto assets, due to a breach in one of its multisig wallets.
The recovery program marks a significant step by CoinSwitch in addressing the aftermath of one of the largest crypto hacks in India.
On July 18, 2024, WazirX, one of India's leading cryptocurrency exchanges, suffered a devastating cyberattack targeting its multisig wallet. The breach led to the theft of $230 million worth of cryptocurrency, leaving users with unrecoverable losses and shaking the trust in the platform.
CoinSwitch, which had 2% of its funds, totaling ₹12.4 crore, stuck with WazirX, is pursuing legal action to recover these assets. In the meantime, the company has stepped in to offer relief to affected users through the 'CoinSwitch Cares' initiative.
The ₹600-crore recovery program aims to provide users with financial and strategic support to mitigate their losses. Here are the key features of the initiative:
CoinSwitch offers assured rewards to affected users who deposit their funds onto the platform. Users can earn up to 10% of the deposited funds as rewards, which will be distributed over a period of two years. This ensures users receive consistent financial support as they rebuild their crypto portfolios.
CoinSwitch plans to pool the trading revenue generated from this program and redistribute it to affected users. The redistributed revenue will be proportionate to each user's reported losses, providing a fair and transparent mechanism for recovery.
Affected users can also benefit from referral rewards, earning up to 5% of deposited funds by referring the recovery program to other impacted users. This feature incentivizes community engagement and broadens the program's reach among those in need.
Users have two pathways for recovery:
Immediate Deposit: Users can deposit funds directly to CoinSwitch and start accessing the benefits of the recovery program.
Wait for WazirX Recovery: Users can choose to wait for WazirX to release their funds and then deposit the recovered assets to CoinSwitch for further support.
This flexibility ensures that users can tailor their recovery journey according to their specific circumstances.
CoinSwitch is also taking legal action against WazirX to recover its own funds, which are estimated at ₹12.4 crore in INR. While the legal proceedings are ongoing, the company has assured its users that the recovery program is independent of the outcome of the litigation.
The legal dispute highlights the complexity of resolving crypto asset losses in India, where regulatory frameworks for such scenarios remain underdeveloped.
The 'CoinSwitch Cares' initiative is a significant move by the platform to support the crypto community and rebuild trust in the industry following the WazirX hack. By offering financial recovery mechanisms and ensuring transparency, CoinSwitch aims to position itself as a responsible and user-centric platform.
In a statement, CoinSwitch emphasized its commitment to standing by users during challenging times:
"We understand the impact the WazirX hack has had on users. Through the CoinSwitch Cares program, we are taking proactive steps to provide relief and ensure the crypto community continues to thrive."
The WazirX hack was one of the most significant security breaches in India's cryptocurrency space, shaking user confidence and highlighting vulnerabilities in digital asset storage. The loss of $230 million exposed the need for stronger cybersecurity measures and robust recovery frameworks for victims.
CoinSwitch's response through the recovery program sets a precedent for how crypto platforms can take proactive steps to mitigate the effects of such incidents and restore faith in the ecosystem.
For users affected by the WazirX hack, the 'CoinSwitch Cares' program provides a glimmer of hope. By offering assured rewards, revenue redistribution, and referral incentives, the initiative aims to empower users to recover their losses and regain confidence in their crypto investments.
With its user-friendly approach and clear communication, CoinSwitch has ensured that affected users have a straightforward path to accessing recovery benefits. As the program unfolds, it will serve as a case study for how crypto platforms can address large-scale security breaches and their aftermath.
The 'CoinSwitch Cares' initiative represents a milestone in the Indian cryptocurrency sector, demonstrating how platforms can step up to support users during crises. By allocating ₹600 crore for recovery efforts and introducing innovative features like revenue redistribution and referral rewards, CoinSwitch is not only aiding users but also setting a benchmark for transparency and responsibility in the industry.
As the legal battle with WazirX continues, CoinSwitch's proactive measures are likely to strengthen its reputation as a trusted platform in the crypto space. For the broader crypto ecosystem, this initiative highlights the importance of community-driven solutions and the need for stronger regulatory frameworks to address such incidents in the future.