CoinDCX Rs 378 crore crypto hack: How safe is your crypto investment?

In a significant security breach, Indian cryptocurrency exchange CoinDCX reported a cyberattack that resulted in the theft of $44.2 million, equivalent to Rs 378 crore. Despite the gravity of the situation, Sumit Gupta, Co-founder of CoinDCX, reassured users that their funds are "100% safe" and stored in segregated cold wallets. The exchange quickly responded by temporarily pausing their Web3 trading platform as a preventive measure, which has since resumed normal operations.

Gupta detailed that the incident was confined to a single operational liquidity account and confirmed that "CoinDCX reserves are absorbing all losses." He assured that "trading and withdrawals are running normally," hence users remain unaffected. CoinDCX is conducting an in-depth investigation in collaboration with global security experts.

This cyberattack on CoinDCX comes nearly after an year after WazirX, another leading Indian crypto exchange, was a breach of more than $230 million. CoinDCX’s action may set a new benchmark for the industry.

Roshan Aslam, Co-founder & CEO of GoSats said that the the incident is unfortunate, deep investigations must be launched to understand what went wrong. "The malicious incident at the recent CoinDCX attack is highly unfortunate and a setback for the larger investor community," he said.

However, it was the exchange’s partner liquidity wallet that came under the attack, and the customer funds were not affected. The exchange’s team was prompt to recover the $44 million loss from its treasury. While funds lost as a result of exchange hacks are rarely recovered, we hope that the subsequent investigation highlights the security flaw so such incidents do not occur again," he said.

The exchange is taking protective measures to recover the stolen funds by working closely with authorities and forensic agencies. CoinDCX plans to launch a recovery bounty programme, encouraging cybersecurity experts to assist in enhancing the system's security in exchange for rewards.

Such incidents might be rare in nature and shall not be overlooked as one-offs. Security and user trust must go hand-in-hand as crypto advocates see this asset class as next generation of financial infrastructure Authorities shall do the needful and apprise of the shortcomings and future strategies. 

The CoinDCX incident is a sobering reminder that no platform is immune to evolving cyber threats, said Aishwary Gupta, Global Head of Payments at Polygon Labs. "While it’s commendable that user funds remained safe, this highlights the urgent need for industry-wide adoption of real-time monitoring, rigorous smart contract audits, and transparent incident disclosures."

Amid these developments, Gupta urged users to "beware of scammers" and to rely solely on official communication channels for updates, advising against sharing account credentials. To further strengthen their security measures, CoinDCX is also planning a bug bounty programme, which will reward ethical hackers for identifying vulnerabilities within the system.

Addressing any concerns or misinformation, Gupta advised the public not to "believe rumours or rely on unverified sources for information." CoinDCX is committed to transparency by promising to release verified details as the investigation progresses and is focused on maintaining a trustworthy cryptocurrency ecosystem in India.