CoinDCX Recovers from $44M Hack: Operations Resume with Enhanced Security
CoinDCX Resumes Operations After $44 Million Security Breach
Overview of the Incident
India’s leading cryptocurrency exchange, CoinDCX, has successfully resumed its full range of services following a major security incident that led to a loss of $44 million. The breach, which compromised an internal liquidity wallet, was attributed to a sophisticated exploit on the server side. In response, the exchange has implemented measures to rectify the vulnerability and has reinstated Indian Rupee (INR) withdrawals, enabling users to access their funds without any limitations.
Discovery and Investigation
The attack was first identified by on-chain investigator ZachXBT, who detected the breach approximately 17 hours before CoinDCX made the information public. ZachXBT traced the malicious activity back to a wallet that had received 1 ETH from Tornado Cash. The attacker subsequently moved the stolen assets from Solana (SOL) to ethereum (ETH). The Tel Aviv-based security firm Cyvers raised alarms about the suspicious withdrawals, which led to a manual investigation, as the compromised CoinDCX hot wallet lacked public tagging and proof-of-reserves documentation.
CEO’s Assurance to Users
In a direct communication with the community, CoinDCX’s CEO, Sumit Gupta, reassured users that their assets remained unaffected. “No customer funds have been compromised. Your assets are entirely secure within our cold wallet infrastructure,” Gupta stated in his initial announcement. He clarified that the breach only impacted an internal operational account used for liquidity provisioning on a partner exchange, not the wallets holding customer deposits. “The situation was swiftly contained by isolating the affected account, ensuring that customer wallets remained untouched,” he added.
Restoration of Services
Following the breach, CoinDCX temporarily halted specific operations to conduct a thorough investigation. The exchange has now restored all trading functionalities and INR withdrawal services without any restrictions. “Trading and INR withdrawals on CoinDCX are back to normal and functioning efficiently. You can withdraw your INR at any time without limitations,” Gupta confirmed. He also advised users against making impulsive selling decisions, cautioning that such actions could lead to unfavorable prices and unnecessary losses.
Future Security Measures
In the aftermath of the security breach, CoinDCX is working closely with its partner platform to block and recover the stolen assets while enhancing its security protocols. The exchange plans to introduce a bug bounty program aimed at encouraging security researchers to identify and report potential vulnerabilities. “Every security incident serves as a lesson, and we will use this experience to fortify our platform further,” Gupta remarked.
Implications for the Cryptocurrency Market
Although customer funds were not affected, the CoinDCX breach—linked to a wallet funded through Tornado Cash—raises important questions regarding transparency and wallet management in a market that is still striving to build user trust. Now that operations are fully restored, CoinDCX is committed to implementing stronger security measures and launching a bug bounty program to preempt future exploits. This incident underscores the ongoing challenges cryptocurrency exchanges face in protecting user assets against increasingly advanced cyber threats. The exchange’s swift response and transparent communication are vital for maintaining trust within the cryptocurrency community.
