As an experienced analyst with a keen eye for detail and a knack for deciphering complex situations, I find myself intrigued by the recent turn of events at WazirX. The co-founder Nishcal Shetty’s response to the controversy surrounding the Rs 2000 crore hack has certainly raised eyebrows. While it is understandable that a company would seek to understand the reasons for criticism, his comments seem to imply a lack of self-reflection and accountability.
In response to mounting questions from investors and crypto experts, WazirX co-founder Nishcal Shetty finally spoke out about the Rs 2000 crore hack scandal on Monday, under the glare of intense public scrutiny. The hack of the WazirX exchange, which occurred on July 18, led to a loss of 45% of investor funds and the temporary freezing of the remaining 55%.
In a series of posts on ‘X’, Shetty voiced concerns towards investors and the crypto community about why they didn’t alert him and WazirX regarding the potential dangers of keeping 45% of funds in one wallet. In response to a tweet on ‘X’ from a prominent crypto figure, Shetty asserted that the backlash against WazirX due to their choice to store 45% of investor funds in a single digital wallet has arisen solely after the July 18 cyberattack.
Shetty claimed that his exchange had kept their proof of reserve (PoR) report in public domain over the past year and yet they did not receive any warning regarding the risks of storing a large amount of cryptocurrencies in a single digital wallet.
Nischal Shetty, co-founder of WazirX, expressed surprise that no one from the crypto industry seemed to notice or comment on the fact that opening up these wallet addresses for Proof of Reserves (PoR) over a year ago was potentially a poor practice. He questioned whether this was because he himself had been vocal about PoR in the past and yet didn’t raise any concerns, even if he was aware all along that it wasn’t an industry-standard method.
Previously, PoR was inquired about by numerous individuals, even industry leaders (I assume you may have also asked, given that WazirX had indeed made PoR operational).
These wallets were disclosed as part of the PoR by WazirX more than a year back. Even after the unveiling of PoR, neither you nor anyone else has ever…
— Nischal (Shardeum) 🔼 (@NischalShetty) August 19, 2024
Investors fired back angrily at Shetty’s peculiar comments, stating that they believed Nischal was attempting to shift the responsibility for a questionable decision onto them, as he failed to alert his company of its mistake.
Amazing!
— CA Sonu Jain (Crypto Tax Expert) (@TheWeb3CA) August 19, 2024
On Monday, WazirX issued a statement saying that an audit performed on their exchange’s laptops found no evidence of a breach on July 18, the day of the hack. They accused their former security partner, Liminal Custody, of being responsible for the breach in their system. However, Liminal Custody has denied these accusations and invited WazirX to participate in an impartial investigation into their platform.
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2024-08-19 17:40