CoinDCX Loses $44.2 Million in Overnight Security Breach

Indian crypto exchange CoinDCX experienced a significant security breach, resulting in a loss of $44.2 million overnight. The incident, which occurred in the early hours of Saturday, involved a compromise of an internal operational account used for liquidity provisioning on a partner exchange. The breach was identified by well-known blockchain investigator ZachXBT, who flagged the suspicious transactions on Telegram. Minutes later, CoinDCX CEO Sumit Gupta confirmed the incident, assuring users that their funds were safe and that all trading activities remained operational.

Gupta stated that the compromised account was used solely for liquidity provisioning and that the wallets storing customer assets were not impacted. He emphasized that no customer funds were affected and that assets remained secure in the exchange's cold wallet infrastructure. This incident comes almost exactly a year after the $230 million exploit that took down another Indian exchange, WazirX.

The hack was further investigated by blockchain security firm Cyvers, which flagged the stolen crypto due to suspicious transactions. ZachXBT manually identified the affected wallet as belonging to CoinDCX, noting that the attacker address was funded with 1 ETH from Tornado Cash and later bridged a portion of the stolen funds from Solana to Ethereum. This sophisticated server breach highlights the ongoing threat of cyber attacks in the crypto industry, with hackers becoming increasingly active in recent weeks.

This incident underscores the importance of robust security measures in the crypto industry. Despite the significant loss, CoinDCX's prompt response and assurance of user fund safety are crucial in maintaining trust and confidence among its users. The exchange's ability to quickly address the issue and confirm the safety of customer assets is a testament to its preparedness and commitment to security. However, the incident serves as a reminder of the vulnerabilities that exist within the crypto ecosystem and the need for continuous vigilance and improvement in security protocols.