Crypto Corporate War: It’s Open Season on WazirX Users

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2024 saw the WazirX cyber heist worth approximately 20 billion rupees and subsequent customer management mishaps by the exchange leadership overshadow crypto news. As we step into 2025, the WazirX hack incident is unfolding new developments, with several major Indian cryptocurrency exchanges looking to attract as many as 4.4 million WazirX customers following the aftermath.

The competition among three entities vying for approximately 4.4 million Indian crypto users is as follows: First, CoinDCX has proposed to acquire the WazirX exchange. Second, CoinSwitch has announced a Rs 600 crore incentive plan for WazirX users who decide to abandon the platform and sign up with them instead. Lastly, the leadership of WazirX has pledged that they will restore the platform’s functionality in full by 2025.

As I delve into the complexities of the corporate landscape, I find myself deeply concerned about the 4.4 million Indian users of WazirX who have been left without access to their funds for the past six months. There’s still no clear indication of when, or even if, their portfolios will be restored, even amidst the current bull market. Despite grand assurances from all three Indian exchanges, there’s barely a glimmer of hope in sight for WazirX users.

Cockfight between WazirX, CoinSwitch and CoinDCX to Acquire Users

Initially, CoinDCX took the lead, as their co-founders, Sumit Gupta and Neeraj Khandelwal, signaled their intent to purchase the entire WazirX platform along with its user base. In a straightforward manner, Sumit Gupta stated, “We aim to assist WazirX users, however, this also depends on WazirX’s willingness.

I deeply empathize with the struggles faced by WazirX users, and NeerajKh_ and I are firmly on their side, pledging to assist in any way possible as hack victims. In fact, we’re actively monitoring the situation and brainstorming ways to help alleviate the difficulties of affected users.

— Sumit Gupta (CoinDCX) (@smtgpt) December 30, 2024

In an unexpected turn of events, CoinSwitch CEO Ashish Singhal declared a $75 million initiative aimed at enticing WazirX users with attractive welcome bonuses and increased earnings.

Exceptional feedback on our 600-million-rupee cryptocurrency asset recovery initiative, designed for those impacted by the suspected WazirX hack. We’re trying to assist the Indian crypto community in every way possible, and we welcome your ideas for further improvement. If you’ve been affected, please let us know your thoughts on how we can help.

— Ashish Singhal (@ashish343) January 8, 2025

Ashish Singhal unveiled a support plan called “CoinSwitch Cares,” providing a Rs 600 crore recovery program for approximately 4.4 million affected WazirX users following the July 2024 cyberattack. This dedicated platform, ‘coinswitch cares,’ is designed exclusively for WazirX users, allowing them to estimate their potential recovery amount, make deposits, and collect rewards through it. To access these advantages, users must deposit their compensation funds received from WazirX.

More recently, WazirX has disclosed their intention to resume trading activities around mid-April 2025 and the launch of a decentralized exchange (DEX) in 2025. Nonetheless, users appear less than enthusiastic due to eroded trust towards the platform and its founder, Nischal Shetty.

Helping WazirX Users or Exploiting Crisis?

Although CoinDCX and CoinSwitch claim that their strategies are designed with the user in mind, the swiftness and assertive manner in which they’re carrying out these recovery plans have led to concerns about their actual intentions.

As a crypto investor, I’ve noticed that CoinSwitch, a competitor of WazirX, recently unveiled their ‘CoinSwitch Cares’ program. Interestingly, this initiative seems to coincide with WazirX’s planned distribution of compensation. It certainly looks like this strategy was designed to attract users from the rival exchange and capitalize on the funds they are set to receive as compensation.

The method stands out because it makes users put their future earnings from compensation into CoinSwitch, earning them extra advantages. This method strengthens user devotion and could stop WazirX from rebuilding its platform after a recovery. Notably, in business circles, it’s often said, “Take advantage of your competitor’s flaws to boost your own position.” And, indeed, WazirX competitors are doing just that.

It has been alleged that even WazirX management is taking advantage of their own customers’ hardships, as Shetty declared just weeks after the July 2024 hack, intending to withdraw an additional Rs 100 crore from users’ remaining funds for “legal expenses,” which are presumably related to lawsuits brought forth by competing exchanges.

Final Thoughts

With WazirX management aiming to restart trading and launch their DEX by mid-April 2025, there’s doubt among users as to whether they’ll be able to endure the extra four months of waiting. This scenario underscores a tough truth about business: People are often eager to exploit others’ misfortunes for gain. It remains to be seen if these plans ultimately prove beneficial to the affected users.

In the world of investing, a well-known saying goes, “Buy when others are selling in panic, and sell when others are buying without restraint.” With widespread apprehension about the future of exchanges like WazirX, CoinDCX and CoinSwitch are looking to capitalize on this anxious climate. The question remains, will users follow suit?

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2025-01-08 13:08