Here's my take
What we fail to understand as indians is that these indian crypto exchanges are just like any other bank.
If we consider them as crypto or as most users understand that crypto is freedom, decentralised or privacy, then we are the biggest fool in this argument.
Any Indian crypto exchange is a bank or worst it's like a bank but without any assurances or insurance.
If your bank account gets hacked or the bank becomes insolvent without your causing it, then RBI steps in and Deposit Insurance and Credit Guarantee Corporation (DICGC) will step in and reimburse the users affected.
Unlike in Wazirx, Bitbns, Vauld case, I want you to read carefully and try to understand the point I'm making.
As we study crypto is freedom, decentralised and privacy focused (Web3.0) but we created our accounts on these centralised exchanges (Web2.0) with our KYC documents.
If a exchange is hacked then we should forget about that money as that money was never yours. When you deposit your money to a bank, it's not yours anymore it's the bank money now. Same with the exchanges they have it and you are just a creditor to their platform. Nothing else.
In case of banks you get a plain insurance of 5 lakh rupees if anything happens at the banks or insolvency. In indian crypto exchanges the owner will be on the run or hideout until it's calm and start a new business again. This is where regulators need to watch carefully.
About insolvency, let's take wazirx for this example. According to Wazirx, they are doing a restructuring based on the hack date, the 18th of July 2024.
In their accounts they hold a total amount all together and they will Re-distribute the funds to each other accounts accordingly.
But there's a flaw here, this is not a bank where I keep my INR and it's in my bank and used only in India, this is crypto traded worldwide, 24/7 and volatile.
Why the restructuring process is the end of Indian crypto community is because let's say I was 90% down in portfolio from 1,00,000 rupees to 10,000 rupees at the time of 18th of July 2024.
Now wazirx only has to pay me only that 10,000 rupees because they have determined the date of hack to be the reimbursable amount🥲
But what about that 90,000 rupees now? It's not longer their problem. You will get that 10,000 rupees reimbursed in USDT pair most probably or in token amount but then the tokens would be significantly less as compared to July 18 as the portfolio needs to be balanced for everyone.
If you have read carefully you must have understood the problem here
And why the singaporean court granted Wazirx to go ahead with their restructuring.
They did nothing wrong they are just following a script for restructuring. Funds before July 18th 2024 don't matter in restructuring as 18th July is the main focus here.
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