Following WazirX Hack, India's CoinDCX Launches $6M Investor Protection Fund

CoinDCX has launched a crypto investor protection fund to safeguard users in the event of a security breach. This initiative follows the $230 million hack suffered by Indian crypto exchange WazirX, which compromised nearly 45% of the customer funds in a single wallet.

Sumit Gupta, co-founder of CoinDCX, shared with CoinDesk that the fund will initially hold approximately $6 million (INR 50 crore), sourced entirely from the company's profits. Gupta emphasized that if other exchanges adopted similar measures, it would benefit the entire crypto ecosystem.

The fund is intended to compensate users for losses incurred in rare instances of security breaches. Gupta noted that this amount represents about 1.8% of the roughly $350 million in customer funds CoinDCX manages, with plans to increase it over time. The company will contribute 2% of its monthly brokerage income to the fund, starting with this initiative and adjusting as needed.

Gupta's decision to create the fund comes after he criticized WazirX’s handling of the hack and their proposed plan for managing customer funds. While WazirX’s founder Nischal Shetty described the hack as a rare incident, Gupta clarified that the fund’s creation is not a reaction to a potential threat to CoinDCX but rather a proactive measure to ensure user protection. He highlighted that CoinDCX diversifies its funds across multiple wallets to enhance security, with the fund serving as an additional safeguard.