Indian cryptocurrency exchange CoinDCX has introduced a $6 million Crypto Investors Protection Fund (CIPF) to bolster user security following the recent WazirX hack. The CIPF is designed to reassure investors amid growing worries about exchange safety.
Sumit Gupta, CoinDCX’s co-founder, revealed that the fund will start with INR 50 crore, entirely funded by the company’s earnings. This decision follows the recent $230 million hack at WazirX, which jeopardized about 45% of its customer funds. Gupta highlighted that CoinDCX’s fund is designed to address losses from exceptional incidents like security breaches.
Besides this, Gupta highlighted that the fund is a proactive measure to set a new standard in investor protection. He noted that if other exchanges follow suit, it would greatly benefit the ecosystem. The fund is designed to address the growing need for enhanced security measures in India’s rapidly expanding crypto market.
In terms of funding, CoinDCX plans to allocate 2% of its monthly brokerage income to the protection fund. Initially, the fund will cover approximately 1.8% of CoinDCX’s customer funds, but the company intends to increase this amount over time. This approach showcases commitment to long-term security and investor protection.
Moreover, Gupta stressed that while 100% security cannot be assured, the fund represents an important step towards safeguarding users. CoinDCX employs a diversified approach to managing its funds, reducing risks compared to practices observed in other exchanges. This strategy aims to prevent the concentration of funds in a single wallet, thereby minimizing potential security threats.
Surge in Crypto Hacks: $266M Stolen in July, WazirX Among Major VictimsCoinDCX also made headlines with its acquisition of BitOasis, a leading virtual asset trading platform in the Middle East and North Africa (MENA) region. This acquisition, completed on July 3, marks CoinDCX’s entry into the MENA market and is expected to enhance user experience by broadening product offerings and trading options.
The hack of WazirX has sparked broader discussions about security in India’s digital asset market. Utkarsh Tiwari, Chief Strategy Officer at KoinBX, suggested that Indian exchanges might invest more in security infrastructure to protect investors. This reflects a growing awareness and response to the evolving security challenges in the crypto space.
