Latest news with #CoinDCX
Indian Express
an hour ago
- Indian Express
Hackers wipe out Rs 384 crore from Bengaluru cryptocurrency firm Neblio Technologies; firm says inside job
Bengaluru-based Neblio Technologies Private Limited, the parent company of cryptocurrency exchange platform CoinDCX, said it has lost Rs 384 crore due to hacking, in one of the biggest cyber crimes reported in the country. In a police complaint on July 22, Hardeep Singh, Vice-President, Public Policy and Government Affairs, Neblio Technologies, said that someone hacked into the company's wallet to transfer cryptocurrency worth $44 million (Rs 384 crore) at around 2.37 am on July 19 to six different accounts. During an internal investigation, the company found that the laptop of an employee, Rahul Agarwal, was hacked, and Rs 15 lakh was remitted to his account. When questioned, Agarwal claimed he was engaged in a part-time job. A police officer said Singh alleged in the complaint that Agarwal was given a laptop for office work, and it had been strictly mandated that he was not allowed to use it for other purposes. However, Agarwal ignored the company's mandate, he said. Singh suspected that Agarwal would have joined hands with some unknown persons to hack the cryptocurrency. While speaking to The Indian Express, a spokesperson of Neblio said, 'As the matter is currently under active investigation by the relevant authorities, we are unable to share further details at this point to ensure the integrity of the process is not compromised. We urge the media and the public to avoid speculation or the circulation of unverified information, as it may impede the ongoing investigation.' The Whitefield CEN police have registered a case under sections 66 (computer related offences), 43 (penalty and compensation for damage to computer, computer system etc), 66(c) (indentity theft) and 66(d) (cheating by personation by using computer resource) of Information Technology Act and 303 (theft), 316 (4) (criminal breach of trust), 318 (4) (cheating), 319 (2) (cheating by personation) of Bharatiya Nyaya Sanhita (BNS). The police said they are probing the matter further.
Entrepreneur
a day ago
- Business
- Entrepreneur
Coinbase in Talks to Acquire CoinDCX Amid USD44M Hack Fallout
A forensic report cited backend credential compromise, overreliance on hot wallets, and lack of red-teaming as key vulnerabilities You're reading Entrepreneur India, an international franchise of Entrepreneur Media. US-based crypto giant Coinbase is in advanced discussions to acquire Indian exchange CoinDCX at a valuation below USD1 billion, Mint reported. This marks a steep fall from CoinDCX's USD2.2 billion valuation in 2021 and follows a USD44 million security breach disclosed on July 19. Sources told Mint that Coinbase, already an investor in CoinDCX and rival CoinSwitch, views this as a strategic bet on India's maturing crypto market. A potential Plan B includes merging Coinbase's stakes in both platforms, though CoinSwitch denied any such talks. CoinDCX faced criticism for delaying its breach disclosure by nearly 17 hours. A forensic report cited backend credential compromise, overreliance on hot wallets, and lack of red-teaming as key vulnerabilities. The company launched a USD11 million bounty program to recover stolen funds. CoinDCX's FY24 profits were largely driven by related-party transactions with overseas entities. Excluding these, the firm would have posted losses, Mint reported. Experts also flagged its self-scoped reserve audits and high hot wallet exposure of 28 per cent versus a global 5 per cent benchmark. As Coinbase prepares to launch retail operations in India, the deal could reshape the country's crypto landscape.
Mint
a day ago
- Business
- Mint
Coinbase circles CoinDCX after $44 mn crypto heist
US cryptocurrency giant Coinbase is in advanced discussions to acquire India's CoinDCX as the local crypto exchange recovers from a $44 million hack, two people aware of the development said. A deal may value CoinDCX, one of India's largest crypto exchanges, at less than a billion dollars, sharply below its peak valuation of $2.2 billion three years ago, the people cited above said on the condition of anonymity. If completed, the acquisition would mark a deeper push by Coinbase into India, where it already owns stakes in CoinDCX and rival CoinSwitch. 'Coinbase sees this as a long-term strategic bet," one of the two people cited above said. 'Buying CoinDCX at this discounted valuation is essentially a low-cost gamble—positioning itself for potential upside if India's crypto market eventually matures." Coinbase declined to comment specifically on the acquisition talks. 'We have a bold mission to increase economic freedom globally, and continuously explore opportunities around the world to build, buy, partner, and invest to accelerate our roadmap," a spokesperson said in response to a query. A second option under consideration involves combining Coinbase's stakes in both CoinDCX and CoinSwitch, India's most valuable crypto exchange. While no formal talks are underway, the person cited above said a merger of the two portfolio companies 'is likely, but not yet on the table." CoinSwitch said it is not in active talks about a merger with CoinDCX. 'We don't have active conversations in this regard at this time," co-founder Ashish Singhal said. 'We believe competition is good and it will ultimately benefit users." Coinbase, which registered with India's Financial Intelligence Unit in March this year, is preparing to roll out retail crypto trading in the country. 'India represents one of the most exciting market opportunities in the world today," John O'Loghlen, Coinbase's Asia-Pacific managing director, said in March. If the CoinDCX deal closes, it would mark the company's most significant bet yet on India. Crypto theft On 19 July, CoinDCX reported a crypto theft of $44 million, after hackers targeted an internal account used to provide liquidity to customers. No customer funds were lost. Though blockchain sleuths had noted suspicious activity soon after the breach, CoinDCX disclosed the matter nearly 17 hours later, unlike global firms like Binance and Bybit which have disclosed such incidents instantly. According to the company's own incident blog, the breach occurred on 19 July and was publicly confirmed at 2:30pm IST the next day. On the delay in reporting, this company blog said: 'We chose to be thorough first, then transparent. Once we had a clear picture and had taken all necessary steps to secure the platform, we communicated the facts to our community." In response, CoinDCX launched a recovery bounty programme, offering up to 25%—about $11 million—of any funds recovered. The company stressed its intent to rebuild trust after the breach. Crypto exchange WazirX which was hacked last year too had announced a $23 million bounty to recover stolen assets. But users are yet to receive any of their assets, as court proceedings drag on. A forensic analysis by Giuseppe Ciccomascolo, a London-based crypto and finance journalist, published on said attackers had likely compromised backend servers or internal credentials, rather than exploiting blockchain-level vulnerabilities. The stolen funds were then moved rapidly across blockchain networks and put through mixing services to obscure their trail, complicating recovery efforts. 'Hot wallets remain disproportionately used to enable 24/7 liquidity, but these are precisely the assets that get hit," said Ciccomascolo. A hot wallet is a crypto wallet that is connected to the internet, which makes it convenient for frequent transactions, but also makes it more susceptible to online threats. The breach, Ciccomascolo wrote, was not just a technical lapse but indicative of 'weak segregation practices" and a broader absence of 'continuous red-teaming"—a standard cybersecurity approach where simulated attacks are used to identify weaknesses before real ones are exploited. Finances Public filings by Neblio Technologies, which operates CoinDCX in India, show reported profits of ₹15.5 crore in FY24 and ₹28 crore in FY23; however, a significant portion of its revenues —around 60% in FY24 and 80% in FY23— are derived from services provided to its affiliated entities—Primestack Pte in Singapore and DCX Global in Mauritius. If these are excluded, Neblio would have posted losses in both years. CoinDCX's reporting practices differ from global norms on crypto exchange transparency. Major international players like Coinbase, Kraken, and Binance have moved toward regular third-party proof-of-reserves (PoR) disclosures, auditor-reviewed liabilities, and open wallet attestations. In contrast, CoinDCX's PoR reports follow a format where the scope of the audit is defined by the company itself. 'There's no reason the scope of a reserve audit should be controlled by the company being audited," said fintech and crypto expert Jayjit Biswas. 'The moment you do that, you eliminate any pretence of independence. And that's exactly what's happening across most Indian exchanges." CoinDCX declined to comment beyond its public blog posts. 'We have already shared all the details of the incident as well as our financial health transparently through our blogs," a company spokesperson said. CoinDCX's April 2025 disclosure said that roughly 28% of assets, or about $158 million, were held externally, classified as 'partner funds" or hot wallets. According to Biswas, that figure stands far above the global best practice of sub–5% exposure for internet-connected wallets. 'Such high hot wallet usage would not pass any institutional risk test," Biswas said. Broader concerns In July 2024, WazirX—then the country's largest crypto exchange—suffered a massive $235 million hack attributed to North Korean cybercriminals. The attack triggered investigations by the FIU, CERT-In, the Intelligence Bureau, and even drew judicial scrutiny in Singapore. Investigations uncovered approximately $41 million in related-party payments linked to founder-controlled entities, raising questions about internal controls and corporate governance, according to Reuters. The Enforcement Directorate froze its assets, and the exchange faced banking restrictions, paralyzing large parts of its operations. These breaches in these exchanges have triggered broader concerns about the governance, transparency, and security practices of Indian crypto platforms. Pranesh Prakash, principal consultant at Anekaanta and an affiliated fellow at Yale Law School's Information Society Project, argued that the heart of the problem lies in the absence of clear consumer protection regulation. 'The transparency norms established by regulators like Sebi and RBI are notably absent in India's crypto sector," Prakash said. 'There is currently no framework focused specifically on investor safety and disclosure standards." Prakash suggested a more outcomes-based approach to oversight. Security analysts say both incidents point to the same foundational problem: liquidity is being managed with high-risk practices. Prakash called for a complete philosophical reorientation of crypto regulation. 'Right now, regulators are mostly focused on anti-money laundering, know-your-customer, and tax enforcement," he said. 'But that's not enough. You need investor protection at the core—how it's achieved can vary: through insurance, minimum capital buffers, third-party audits, or strict wallet segregation. But unless you define outcomes, you'll never fix inputs," he said. CoinSwitch co-founder Singhal has been among the most vocal about the structural handicaps facing Indian crypto firms. In a 27 July post, he argued that excessive taxes and regulatory uncertainty have made it nearly impossible for Indian platforms to operate with the same security and compliance rigour as their global counterparts. 'Most startups don't have the luxury of funding, high margins, or scale, and it affects the ecosystem's ability to invest in security and grow," Singhal wrote. 'Security needs serious money. You need top talent, world-class partners, and you need to stay paranoid every day."
The Hindu
4 days ago
- Business
- The Hindu
What happened to the crypto exchange CoinDCX?
The story so far: On July 19, the crypto exchange CoinDCX updated users that one of its internal accounts had been 'compromised.' The company's executives reassured panicked investors and traders that their assets were safe and that access to their crypto would not be cut off. Despite assurances, many CoinDCX customers moved to withdraw their assets, perceiving the event could turn into something like the WazirX hack last year. What happened to CoinDCX? CoinDCX is a Financial Intelligence Unit (FIU) registered Indian cryptocurrency exchange founded in 2018 by Neeraj Khandelwal and Sumit Gupta, now counting over 1.6 crore registered users. On July 19, the exchange shared that one of its 'internal operational accounts, used solely for liquidity provisioning on a partner exchange, was compromised due to a sophisticated server breach.' Mr. Khandelwal clarified this involved unauthorised access to an operational hot (virtually connected) wallet on a partner exchange. CoinDCX reported financial exposure of about $44 million but stressed that the incident was contained by isolating the affected account, which was segregated from the company's customer wallets. The exchange further added that the exposure was limited to that amount alone and that it would be fully absorbed by CoinDCX through its own reserves. 'The incident has been formally reported to CERT-In, and we are actively working with leading blockchain forensics firms and ecosystem partners to trace the attacker and recover assets,' said CoinDCX in its Incident Report, and provided information about the cross-chain movement of the stolen assets. The company also announced a recovery bounty programme. How were CoinDCX users impacted by the hack? CoinDCX repeatedly stressed that customers' funds were secure and unaffected by the hack, as they were placed in segregated, cold wallets that are challenging for attackers to breach. The company also stated that trading, rupee deposits, and rupee withdrawals remained fully functional throughout the period. However, some customers complained that their withdrawal requests took time to be processed, sparking fears that their funds had been frozen. CoinDCX's founding partner Mridul Gupta said that 'operational challenges caused by high withdrawal volumes during non-banking hours' had led to some delays but denied allegations of a freeze. The company later confirmed that all withdrawal requests had been successfully processed. While crypto withdrawals are not possible for everyone using CoinDCX, this is a pre-existing situation that is part of the company's risk policy and was not caused by the hack itself. Furthermore, the exchange faced accusations of a 17-hour-long delay when it came to updating customers about the hack. CoinDCX defended its actions and said it needed to have all the information before issuing a statement to customers but said investigating agencies were immediately informed and onboarded. 'Our first priority is always to act, not just to speak. Before making a public statement, we had to ensure the threat was fully contained, our platform was secure, and all customer funds were safe. Communicating with incomplete or unverified information would have been irresponsible and could have caused unnecessary panic,' said co-founder Sumit Gupta. Other CoinDCX users raised complaints about temporary price drops for certain assets, as well as some tokens being under maintenance, which the company also addressed. How are the CoinDCX and WazirX hacks different? Just a little over a year ago, on July 18, 2024, WazirX was targeted by North Korean cyber-thieves. That day, a multi-signature wallet that the WazirX exchange was managing with the company Liminal was exploited, leading to the loss of assets worth over $230 million. This was far greater than the losses reported by CoinDCX; WazirX customers' assets were directly affected by this breach. After much delay and confusion, WazirX blocked users' access to their crypto for an indefinite period of time and acknowledged significant losses. By contrast, CoinDCX has stressed that it is business as usual for the exchange, noting on X that its annual revenue exceeds ₹1,100 crores. WazirX customers demanded that the company use its own profits or funds to cover losses, but the company said this was not possible, citing an ownership dispute with the international crypto exchange Binance. WazirX further decided to carry out its legal restructuring exercise in Singapore. WazirX users have not been able to access their locked up crypto for over a year and are set to vote for a second time on the amended Scheme of Arrangement. This comes after the first proposed restructuring plan was rejected by the Singapore High Court. Both WazirX and CoinDCX were hit with criticism for delays in informing their customers about their respective hacks. What is the lesson for crypto investors in India? Investors in India should remember that crypto trading is a largely unregulated activity in the country; even users of centralised, FIU-registered exchanges can expect little to no support from the Indian authorities in case of a crisis such as a security breach. Satnam Narang, Senior Staff Research Engineer at Tenable, explained that if users want full control of their coins, they should consider self-custody options like an offline, hardware cold wallet they directly control. Even here, due diligence is required in order to buy only trusted hardware wallets from legitimate sellers, according to him. 'As more and more exchanges have been set up across the world, we have seen reports of attacks targeting smart contract flaws or other ways to steal funds from these exchanges including but not limited to social engineering, theft of credentials or private keys or targeting a third-party company that works with the targeted organization,' said Mr. Narang, noting that the CoinDCX hack was one of the largest cryptocurrency breaches since the attack against WazirX last year. He highlighted that when crypto prices go up, there is also a rise in attacks against both exchanges and customers. Mr. Narang said that traders storing coins on crypto exchanges should use multi-factor authentication and strong passwords, or store their coins securely offline, if possible. 'There is an old adage in the cryptocurrency space that says: 'not your keys, not your crypto/coins'. As long as users store their cryptocurrency on an exchange, those coins don't necessarily belong to them because the exchange could ban their account or an exchange hack could lead to the loss of coins,' explained Mr. Narang.
India.com
5 days ago
- Business
- India.com
Meet the owners of CoinDCX and WazirX, victims of India's biggest crypto theft after platforms hit by Rs 23610000000 cyber crime
Meet the owners of CoinDCX and WazirX, victims of India's biggest crypto theft after platforms hit by Rs 23610000000 cyber crime Recently, two of India's major cryptocurrency exchanges, CoinDCX and WazirX, have become victims of serious cyber attacks. CoinDCX suffered a loss of around Rs. 378 crore (about 44 million dollars) due to a breach in one of its internal accounts. This hacking incident took place on July 19. Last year, crypto exchange WazirX was also hit by a major cyber attack, just like the recent one at CoinDCX. In that incident, hackers stole user holdings worth about USD 230 million (around Rs. 1,983 crore). Over the last few years, India has seen multiple cyber fraud cases in the crypto sector, and now CoinDCX has also joined the list of affected companies. The total value of both attacks adds up to a shocking Rs. 2,361 crore. Let's take a quick look at the people behind these two popular crypto exchanges: WazirX, Founded by Nischal Shetty Nischal Shetty is the founder and CEO of WazirX, one of India's top cryptocurrency platforms. He is from Mumbai and studied computer science at Visvesvaraya Technological University and graduated in 2007. He started his career as a software developer. In 2010, he launched his first startup called Crowdfire, a social media management app that became quite popular. In 2018, Nischal started WazirX to help more people in India learn about and use cryptocurrency. The platform grew very fast and got over 1 crore (10 million) users. In 2019, it was bought by Binance, the world's biggest crypto exchange. Later, in 2022, Nischal started a new project called Shardeum. It's a blockchain platform that is built to work for a large number of users. Its goal is to make blockchain technology easier to use and more helpful for everyone. As per a recent Business Today report, Nischal Shetty and WazirX co-founder Siddharth Menon have moved to Dubai, but WazirX still has offices in Mumbai and Bengaluru. Who owns CoinDCX? While WazirX has been in the spotlight, CoinDCX, another major Indian crypto exchange, also made headlines after the recent cyber attack. CoinDCX was founded in 2018 by Sumit Gupta and Neeraj Khandelwal. Sumit Gupta, an IIT Bombay graduate, is the current CEO of the company. At just 19 years old, he started his first business and also worked at a multinational company in Tokyo.
