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CoinDCX, India’s first digital asset unicorn, has been hit by a serious security breach, resulting in a loss of $44.2 million. Hackers drained all funds from one of its internal operational accounts—a critical account used for liquidity provisioning on a partner exchange that ensures smooth and efficient trading.

This marks India’s second major crypto hack within a year, following the $230 million cyberattack on WazirX exchange in July 2024, carried out by North Korea’s Lazarus Group.

CoinDCX has confirmed that customer asset wallets remain secure and INR withdrawals and trading operations continue to function normally. Despite the severity of the breach, CoinDCX has assured users that no customer funds are at risk. Co-founder Sumit Gupta stated the platform will fully absorb the loss using its own reserves, which remain “sufficiently healthy.” A thorough investigation is in progress in partnership with international security experts. Gupta said that the exchange is actively cooperating with law enforcement and forensic agencies to trace and recover the stolen assets.

Following the cyberattack, CoinDCX received 31,462 INR withdrawal requests from customers. According to Gupta, 30,862 of these—approximately 98.09%—have already been successfully processed. The remaining 600 requests are in progress and are expected to be completed within 72 hours of submission.

This incident heightens ongoing concerns over the vulnerability of crypto platforms amid a rising wave of sophisticated cyberattacks.

Gupta shared that CoinDCX’s internal security and operations teams are actively investigating the incident in collaboration with top cybersecurity firms. Their efforts focus on identifying and fixing vulnerabilities, tracking fund movements, and working closely with their exchange partner to freeze and recover affected assets. CoinDCX has announced a Recovery Bounty Program offering up to 25% of any recovered funds as a reward to individuals or teams who contribute to tracking and recovering the stolen assets and, more critically, to identifying and aiding in prosecuting those responsible for the attack.

“Every security incident is a learning and we will learn from this and further strengthen our platform, more importantly this is our time to win this war against cyberthreats in the industry and we commit to work together with experts to secure our industry,” Gupta informed.

In 2021, CoinDCX became India’s first digital asset unicorn after securing $90 million in funding, pushing its valuation to $1.1 billion. The next year, it raised an additional $135 million, nearly doubling its valuation to $2.15 billion. In July 2024, CoinDCX took a significant step toward global expansion by acquiring BitOasis, a digital asset platform based in Dubai. The exchange also listed the BSV token for trading on its platform, allowing users to have more ways to buy, sell and trade BSV.

‘Let us legislate cryptos’

In the last year, India suffered two of its most significant digital asset breaches—first at WazirX in July 2024, where hackers made off with $230 million in digital assets, and now at CoinDCX, which confirmed a loss exceeding $40 million. These incidents have struck the country’s two largest exchanges, with WazirX alone losing nearly 45% of its holdings.

“Are the crypto entrepreneurs only responsible for this worrying state of affairs? Is our public policy and government, which has refused to enact any crypto assets legislation and to regulate their trading in exchanges also responsible?” Subhash Garg, former Finance and Economic Affairs Secretary, Government of India, raised questions in a LinkedIn post.

In contrast, the United States has moved swiftly, Garg pointed out. The world’s largest economy has introduced comprehensive legislation, including laws for stablecoin regulation and the Clarity Act to define the legal framework for digital assets as commodities.

“We are, however, vaccinating. For five years, the (Indian) government is promising to bring a paper on the subject. Even that paper has not been delivered. Let us not keep sitting on our hunches. Let us deal with the crypto phenomenon. Let us face it. Let us legislate cryptos,” Garg wrote.

Garg’s remarks come days after Pradeep Bhandari, national spokesperson for the ruling Bharatiya Janata Party (BJP), publicly called for creating a national Bitcoin reserve while stressing the critical need for regulation. India’s current digital asset stance—heavily taxed yet still unregulated—remains stuck in limbo. Bhandari reiterated that a clear, decisive policy is urgently needed to unlock the sector’s potential and ensure investor protection and innovation.

“Clear regulation could bring both transparency and the required oversight to this emerging asset class — enabling responsible innovation while protecting a rising investor class. This is essential for fostering institutional confidence and building a framework where Bitcoin can play a meaningful role in India’s macroeconomic strategy,” Bhandari emphasized in an article for India Today.

In December 2024, the Indian government stated that there was no definitive timeline for rolling out comprehensive virtual digital assets (VDAs) regulations. However, by June 2025, the government signaled a shift in approach, announcing plans to soon release a detailed discussion paper on digital assets. This paper will draw on insights from international bodies such as the International Monetary Fund (IMF) and the Financial Stability Board (FSB).

India enforces one of the most stringent tax regimes on digital asset trading, including a flat 30% tax on all profits from digital assets, with no allowance for offsetting losses, a 1% tax deducted at source (TDS) on transactions exceeding ₹10,000 (approximately $116), and an 18% Goods and Services Tax (GST) on trading fees. According to a report by the Esya Centre, an Indian policy think tank, this framework could result in a potential loss of $1.2 trillion in trading volume on domestic exchanges.

The regulatory pressure has prompted the Seychelles-based OKX exchange to exit the Indian market, citing compliance challenges. Looking ahead in 2025, India’s digital asset sector is expected to undergo significant consolidation, with smaller exchanges likely to shut down or merge with larger players. This trend is being primarily fueled by the burdensome tax policies surrounding virtual digital assets.

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