Key Points
Traders whose coins and funds are frozen at WazirX -- the Indian crypto exchange that was recently hit by a massive cyber heist --- are now discovering this from the fine print of the terms and conditions they had hitherto ignored...
What is coming to the fore in the wake of the WazirX fiasco is that unlike banks or stock exchanges most local crypto platforms categorise cyber breach as a force majeure event (or, an Act of God) in their terms of use that investors signing in to open accounts rarely read..
A WazirX spokesperson said that most virtual digital asset service providers and some of the stock brokers include cyber breach as a force majeure event because such attacks are often beyond reasonable control of the service provider...
Rival crypto exchanges agree that a platform beaten by a third-party malware attack may justify it as a force majeure event provided reasonable security measures are implemented..
Sangram Gayal, who leads the Cyber investigations practice at PwC believes there is nothing force majeure about a cyber breach as it is the fiduciary duty of a financial services organisation to implement adequate cyber security measures..
