After WazirX, India’s second largest crypto exchange CoinDCX faced a cyberattack on July 19 in one of its internal operational accounts used for liquidity provisioning, draining about $44.2 million.
The breach happened over 17 hours ago, ethical hacker ZachXBT had said within the community. CoinDCX has also halted its Web3 operations for the time being as a precaution but maintained that customer funds on CoinDCX Web3 also remains safe.
Confirming the same, Sumit Gupta, Co-founder and CEO, CoinDCX said on X, “Today, one of our internal operational accounts - used only for liquidity provisioning on a partner exchange - was compromised due to a sophisticated server breach. I confirm that the CoinDCX wallets used to store customer assets are not impacted and are completely safe.”
He added that no customer funds were impacted and their main assets remain safe in a secure cold wallet infrastructure. All trading activity and INR withdrawals continue to be fully operational.
“The incident was quickly contained by isolating the affected operational account. Since our operational accounts are segregated from customer wallets, the exposure is only limited to this specific account and is being fully absorbed by us - from our own treasury reserves. Our internal security and operations teams have been working through the day along with leading cybersecurity partners to investigate the matter, patch any vulnerabilities and trace the movement of funds,” Gupta said.
This is happening exactly a year after WazirX's crypto assets worth $234 million were hacked on July 18, 2024. Incidents like these could be a major setback for the crypto industry in the country, where the regulators are still evaluating the space and remain wary of such challenges.
In next steps, Coindcx will be collaborating with its exchange partner to block and recover assets and will be coming out with a bug bounty program soon.
"I understand incidents like this can be unsettling - even when customer assets are unaffected. That's why I am sharing this incident with you with full transparency," Gupta said on X.
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