Following WazirX's $230 Mn hack, CoinDCX has set up a crypto investors protection fund (CIPF) to compensate users for losses incurred in security breaches or other adverse events
While the size of CoinDCX’s CIPF is currently set at INR 50 Cr, the crypto exchange has vowed to add 2% of brokerage income to the corpus, with annual revisions and increasing the pool size of the fund over time
Gupta emphasised that the one-of-its-kind CIPF is a significant step towards building long-term trust in the Indian crypto ecosystem
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In light of the recent cyberattack on WazirX that stole $230 Mn from the crypto exchange, its peer CoinDCX has set up a first-of-its-kind crypto investors protection fund (CIPF) to compensate users for losses incurred in security breaches or other adverse events.
While the size of CoinDCX’s CIPF is currently set at INR 50 Cr, the crypto exchange has vowed to add 2% of brokerage income to the corpus, with annual revisions and increasing the pool size of the fund over time.
Explaining the rationale behind establishing such a fund, Sumit Gupta, cofounder of CoinDCX, said, “In an extremely rare event of a security breach or an adverse event, this dedicated fund will provide an additional layer of protection, ensuring that our customers’ assets remain secure and intact.”
Gupta emphasised that the one-of-its-kind CIPF is a significant step towards building long-term trust in the Indian crypto ecosystem.
The development comes days after CoinDCX’s competitor, WazirX suffered what is being called the biggest cyberattack on an Indian crypto exchange till date, with hackers stealing $230 Mn in crypto assets, representing 45% of total user funds held on the platform, from one of its multisig wallets.
Soon after the crypto heist, WazirX went on the damage control mode, suspending operations and withdrawals on the platform. While Niscal Shetty, cofounder of WazirX, earlier proposed to make customers absorb 45% of losses arising from the crypto hack, the move faced flak from the crypto community.
At the time, CoinDCX’s Gupta took aim at WazirX’s socialised loss strategy, calling it “utter nonsense” and said that the way the latter was handling the entire hack episode could harm the entire Indian crypto ecosystem and stakeholders.
After courting controversy over its 55-45 approach, where WazirX would unlock 55% of a user’s portfolio tokens for trading and lock the remaining 45%, the crypto exchange has reportedly abandoned the move.
Further, WazirX has filed a first information report (FIR) with the special cell of New Delhi’s Lodhi Colony police station in connection with the recent $230 Mn hack on the platform.
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