WazirX Poll: In light of the recent major hack, the most recent WazirX poll gives customers two choices for getting some of their money back. This study details these alternatives and their effects on users, tax consequences, and maximum withdrawal amounts. The significance of the vital August 3 deadline has also been deciphered.
The WazirX Poll Options
1. Access 55% of Your Funds Without Withdrawals, First Priority to Potential Recovery Proceeds:
- This option allows users to access 55% of their portfolio without the ability to withdraw these funds immediately.
- Hence, users choosing this option will have priority when potential recovery proceeds are distributed.
2. Access 55% of Your Funds With Withdrawals, Second Priority to Potential Recovery Proceeds:
- This option enables users to access and withdraw 55% of their portfolio.
- Thus, users opting for this will have second priority in receiving any potential recovery proceeds.
To help WazirX make a final decision, the poll will be updated every fifteen minutes. The results of the poll, current investigations, platform liquidity, and changing conditions will all be taken into account by the exchange. The second option is now the most popular because most customers want their withdrawals processed quickly.
How Will It Impact On Users?
As a result of the breach and the accompanying poll options, users encounter multiple difficulties.
Snapshot Date Controversy:
- The snapshot for valuing user portfolios is set for July 21, three days post-hack. Critics argue this is unfair as WazirX continued to allow deposits and trading after halting withdrawals on July 18.
- This allowed ‘illegal’ trading, as WazirX did not have the token backing for these transactions due to the loss of 45% of user funds. Moreover, prices plummeted due to panic selling as people sold their crypto for INR after knowing the fiat reserve was unaffected. Nonetheless, the panic situation led to further losses.
Replacement of Stolen Tokens:
- Users will receive a basket of tokens equivalent to their stolen tokens based on average prices from CoinMarketCap and select global exchanges as of July 21, 2024, at 8:30 p.m. IST.
- This replacement ensures users can access the value of their stolen tokens but does not address the issue of the snapshot date.
WazirX Poll Raises Tax Concerns
Forced Token Conversion:
- The replacement of stolen tokens involves converting them into a balanced crypto basket. In India, this transfer of crypto assets incurs a 1% TDS (Tax Deducted at Source).
- The responsibility of bearing this TDS is unclear. This will add to users’ financial burden as they already face significant losses and restricted access to their funds.
Capital Gains Tax:
- If users held appreciated tokens, such as Shiba Inu (SHIB), and these tokens were stolen, their replacement with a different token might be considered a sale.
- This could attract a 30% capital gains tax on the profit. Moreover, this is unjust as users are already disadvantaged by the hack and the locking of 45% of their funds.
Read More: SHIB Sacked From Indian Exchange Due To Hack
Exchange Withdrawal Limits
The 55% of funds consumers can access will be subject to daily withdrawal limits set by WazirX. So, not even the unlocked part of users’ assets may be quickly withdrawn. Therefore, it further limits their ability to manage their finances.
August 3 Deadline’s Importance
- The poll’s deadline for user responses is August 3, 2024, at 07:00 a.m. IST. This date is crucial as it marks the final opportunity for users to voice their preferences on how to proceed.
- WazirX will resume platform operations shortly after the poll, making this deadline critical for shaping the recovery process and future operations.
Bottom Line
Users can make difficult decisions with major ramifications in the WazirX Poll. The snapshot date, tax implications, and withdrawal limitations further complicate consumer matters. To determine the following actions and ensure that users’ voices are heard, the deadline of August 3 is crucial. Learning from the mistakes of prior exchanges, the current one must strike a balance between equitable recovery and stable operations.
