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The $230 million hack on Indian crypto exchange WazirX last month has prompted CoinDCX to proactively plan for potential security breaches. CoinDCX, India’s leading crypto exchange, has established a $5.9 million fund to compensate customers in the event of such incidents.
Called the Crypto Investors Protection Fund (CIPF), the fund is designed to reimburse customers for losses incurred during rare security breaches.
In a press release sent to Cryptonews, the exchange stated that the fund aims to set high security standards within the Indian crypto ecosystem. The CIPF “will ensure CoinDCX customers’ assets remain protected” in the unlikely event of a breach, the exchange noted.
The CIPF will have an initial allocation of 50 crore rupees, worth approximately $5.95 million. CoinDCX has established a governance framework for the credit and utilization of the CIPF to ensure transparent and effective management.
Additionally, CoinDCX will contribute 2% of its brokerage income to the CIPF corpus annually. The exchange also plans to review and potentially increase the fund size over time.
Sumit Gupta, Co-Founder of CoinDCX, stated that the dedicated fund “will provide an additional layer of protection” during an extremely rare security breach.
“We commit to adding 2% of brokerage income to the corpus and increasing the pool size over time. We will continue to monitor the fund’s size, maintaining the balance at a level adequate to safeguard our users’ assets.”
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CoinDCX, a Financial Intelligent Unit (FIU) registered crypto exchange in India, has received ISO certification for its security measures.
“At CoinDCX, security is our top priority. We invest heavily in top-notch security practices and follow robust security measures to ensure our customers’ assets are protected at all times.”
CoinDCX Believes WazirX-Like Crypto Hacks Are Rare
The exchange emphasized that security breaches and adverse events are unlikely. CoinDCX highlighted its “strong security posture,” adding that its assets under management (AUM) “are diversified across multiple vaults ensuring an added layer of security.”
Gupta further noted that it would be “better for the ecosystem” if other exchanges followed CoinDCX’s example in fund allocation.
“Nobody can assure 100% security,” said Gupta. He added that ensuring customer protection even in the slightest chance of a breach is crucial.
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