This post is going to be as blunt as possible and let me take out all my anger, sorrow emotions all together.
On July 18 2024 wazirx exchange experienced a cyber hack in their cold wallets. I noticed it happened live while I was with my father for his regular checkup. I was of the opinion that it must be a hoax or might be little amount as they must have had all their funds in cold wallets and wallets don't get hacked as it is backed by blockchain and we hold the private key.
So I went on with my day and when I return back that evening it was raining tweets all over and it was catastrophic. Ideally I should have withdrawn the money as it was unfolding at 11 o clock but the wazirx fan in me was too strong to withdraw.
I didn't withdraw when the government announced ban on crypto in 2018.
I didn't withdraw when FTX fraud happened, lol I brought some during the downturn hoping to get some return but lost!
I didn't withdraw when Terra LUNA happened, I also brought some in the down turn and this one was way too much out of reach/got my hands burned when I calculate it now. I thought these global exchanges had too much influence and would recover but I was wrong!
I didn't withdraw when 30% taxes and 1% tds was announced by the government in 2022.
I didn't withdraw from wazirx because I had to have an Indian exchange to do my taxes as withdrawing was not an option for me because I had every token listed on the platform and selling them to other tokens would be taking huge losses just to transfer.
Instead I had to withdraw my funds from zebpay in 2018 because of RBI ban and what good way did I found? Yeah it was wazirx which had all my money from zebpay. I was one of their early members which did all the sign up thing and referral thing, so they had a strong hold on me even before launch!
Remember this is what we all crypto users had to go through when somebody from our friends and relatives say, oh! You got so lucky when got into bitcoin early😂
PS. It's not!
While I've lost all my portfolio I've learnt some learning and would like to share some to avoid future generations to avoid losses. Consider these as do's and don't
1) If you are on an Indian exchange and it doesn't allow you to withdraw your funds to other global exchanges or in your personal wallets just don't contact their support team and waste your time.
Just withdraw your funds by selling that coin and get it into your bank account. Your money is better safe in your bank account than on those exchanges.
You must ask why you so say?
Here's a thing in crypto we say not your keys not your crypto. In crypto exchanges those values that you are trading are just numbers, nothing else. We don't know how much reserves they are holding or have in real, in app they can morph those numbers to make us seem real. Better to keep it on your wallets and bring it to trade on exchanges when you really need INR.
The owners of those exchanges don't keep their whole portfolio in their own exchange then, who are we 😂🙏
2) If the exchange you are using don't release/post or show their proof of reserves then also quietly withdrawal money in your bank account it's not worth it believe me.
3) if the exchange you are trading doesn't show their profit and loss statement monthly/quarterly or yearly then there's definately something fishy because once the hack happens they will say we didn't make any profits and we will use your money to fight our cases or fund our exchange for salaries.
4) if they don't have their offline office in metro cities or in your state then don't ask just run! Sell everything and withdraw money.
I know it all looks very good and sophisticated when everything is online and it's good for the companies to run that way but let me share you a story my father used to tell when foreign companies used to offer him credit cards even before there were regulations.
My father was offered a credit card via a foreign entity in the late 80's or 90's as he was a government official and it was not likely they would default on the loan. My father only asked one thing. Do you have an office in Mumbai? And that bank said no we only had a operating office in Delhi and it is completely legal. We are not breaking any Indian laws. My father declined respectfully saying if something happens to that card or mishaps happens I will have to go through the hassle of going to Delhi and even then there's no guarantee. My father is wise I'm not! So ask your crypto exchanges to have an offline office in your respective cities otherwise enjoy the view, touch some grass. These indian exchanges earn so much money they can't afford to hold offices in regional languages that's a pathetic Joke.
5) these indian crypto exchanges are just like banks but without the banking licence. Now tell me would you like to hold funds in such exchanges? These exchanges do so intensive kyc and we accept their terms and conditions but when you ask for accountability, you get none.
6) if your crypto exchange is registered with another foreign entity like Singapore, mauritius, UAE or united states just run don't ask! They will use it against you when the rainy day comes in case of hack or anything like AML/fema regulations. Ask them if they are listed in india? They will definitely say yes but also ask where do you also have offices you will get a better idea.
7) if they don't have any insurance then also don't use them, in case of hack if they can't cover the money, then it's better to keep it in Indian banks. Why because in banks you get upto 5 lakh rupees in case of any kind of fraud happened to bank within 6 months. Over here you will be played by saying that we will recover your funds and you will get the upside of your money by holding your crypto with us and what not, but it's not worth it. You should ask them about their backed up funds which should be atleast 150% of the total assets at any given time because crypto is volatile and prices rise all of a sudden. Let me explain you, if they kept 100% insurance for their reserves and then the market pumps and hack happens they won't have the means to cover that money anyhow! There are many examples look at vault, bitbns and wazirx.
Remember these are not indian exchanges they are just operating entity in india but governed by other country laws. You might ask why are these points so important? Because when everything is all right we don't seem to notice a bad day, not everything is going to be sunshines and rainbows. In the end they are a profit making company and will look for themselves first for sustainability. What about users? Didn't they accepted the terms and conditions while signing up on the platform 😁
The wazirx hack will be used by other exchanges as a template when their time comes. Believe it or not!
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