CoinDCX Offers 25% Bounty After $44 Million Hack

Indian cryptocurrency exchange CoinDCX has announced a recovery effort after falling victim to a $44 million exploit last Friday, with the firm pledging a bounty for white hat hackers who help retrieve the stolen funds. The incident involved the exploitation of CoinDCX’s internal accounts used for “liquidity provision,” resulting in the theft of $44 million worth of cryptocurrency. User funds, however, remained unaffected.

In response to the breach, CoinDCX CEO Sumit Gupta announced a new recovery bounty program. This initiative offers white hat or ethical hackers up to 25% of any recovered funds that can help trace and retrieve the stolen assets. Gupta emphasized the importance of identifying and catching the attackers to prevent similar incidents in the future. “The exposure was from our own reserves, and we have already absorbed it through our corporate treasury,” Gupta stated in a Monday post. He further assured that the hack does not impact any of the customers and that the platform continues to run as normal.

The CoinDCX hack occurred a year after an unknown hacker stole over $230 million from WazirX, another Indian cryptocurrency exchange, in the second-largest cryptocurrency hack of 2024. These incidents, however, pale in comparison to the over $1.4 billion exploit suffered by the Bybit exchange on Feb. 21, which marked the largest crypto theft in history.

The CoinDCX hack is part of a renewed wave of exploits on centralized cryptocurrency exchanges. According to Michael Pearl, vice president of GTM strategy at blockchain security firm Cyvers, the recent exchange hacks serve as stark reminders that centralized platforms remain prime targets for sophisticated access control attacks. In Q2 2024 alone, over 65% of losses in Web3 originated from CEX-related incidents, with nearly $500 million lost due to wallet access breaches. These incidents highlight systemic weaknesses in the security posture of centralized exchanges.

Pearl urged exchanges to rethink their security measures and move to preemptive solutions such as real-time wallet monitoring. Preemptive solutions, such as offchain transaction validation, could prevent 99% of all crypto hacks and scams by simulating and validating blockchain transactions in an offchain environment before mainnet execution. This approach aims to enhance the security of cryptocurrency exchanges and protect against future exploits.