CoinDCX Offers 25% Bounty to Recover $44.2 Million Hack

Indian cryptocurrency exchange CoinDCX announced a recovery effort after falling victim to a $44 million exploit on Friday, with the firm pledging a bounty for ethical hackers who help retrieve the stolen funds. CoinDCX’s internal accounts used for “liquidity provision” were exploited on Friday, leading to $44 million worth of cryptocurrency being stolen, while user funds remained unaffected.

In an effort to recover the stolen funds, CoinDCX CEO Sumit Gupta announced a new recovery bounty program that offers white hat hackers up to 25% of any recovered funds they can help trace and retrieve. “The exposure was from our own reserves, and we have already absorbed it through our corporate treasury,” said Gupta in a Monday X post, adding: “More than recovering the stolen funds, what is important for us is to identify and catch the attackers, because such things shouldn’t happen again, not with us, not with anyone in the industry.” The hack “doesn’t impact any of our customers and the platform continues to run as normal,” he added.

The CoinDCX hack occurred a year after an unknown hacker stole over $230 million from WazirX, also an Indian cryptocurrency exchange, in the second-largest cryptocurrency hack of 2024. Still, these hacks pale compared to the over $1.4 billion exploit suffered by the Bybit exchange on Feb. 21, the largest crypto theft in history.

The CoinDCX hack is part of a renewed wave of exploits on centralized cryptocurrency exchanges. 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 are not isolated events, they’re systemic weaknesses. The Cyvers team “urges exchanges to rethink their security posture” and move to preemptive solutions such as real-time wallet monitoring. Preemptive solutions, including offchain transaction validation, could prevent 99% of crypto hacks and scams by simulating and validating blockchain transactions in an offchain environment before mainnet execution.

CoinDCX, a prominent Indian cryptocurrency exchange, recently announced a significant recovery program following a substantial hack that resulted in the loss of $44.2 million. The exchange has launched a White Hat Recovery Bounty Program, offering up to 25% of any successfully recovered funds as rewards for actionable intelligence that leads to the retrieval of the stolen assets. This initiative is aimed at ethical hackers and members of the Web3 community, encouraging them to contribute to the recovery efforts. The hack, which targeted stablecoins, has prompted CoinDCX to take proactive measures to enhance its security protocols. The exchange has emphasized the importance of transparency and has assured users that customer funds remain secure. The recovery program is part of a broader strategy to restore full functionality and regain user trust. CoinDCX has also revealed plans to introduce a bug bounty program, inviting white-hat hackers to identify and report vulnerabilities before malicious actors can exploit them.

The exchange has resumed operations, with Indian Rupee (INR) withdrawals reopening, and has restored full functionality. This move is seen as a step towards rebuilding confidence among its user base, who have called for better transparency and security measures in the wake of the hack. The recovery program not only aims to mitigate the financial impact of the hack but also to strengthen the exchange's security infrastructure, ensuring that such incidents are less likely to occur in the future. The announcement of the White Hat Recovery Bounty Program underscores CoinDCX's commitment to addressing the security breach head-on. By leveraging the expertise of ethical hackers and the Web3 community, the exchange hopes to recover a significant portion of the stolen funds. This proactive approach is a testament to CoinDCX's dedication to protecting its users' assets and maintaining the integrity of its platform. The exchange's efforts to enhance transparency and security are crucial in rebuilding trust and ensuring the long-term success of its operations.