In response to the recent $230 million hack on Indian crypto exchange WazirX, CoinDCX, India’s leading crypto exchange, has initiated a $5.9 million fund aimed at protecting investors in the event of similar security breaches.
Launch of the Crypto Investors Protection Fund (CIPF)
CoinDCX has introduced the Crypto Investors Protection Fund (CIPF) to reimburse customers for losses incurred due to rare security incidents. According to a press release sent to Cryptonews, the CIPF is designed to ensure the safety and protection of CoinDCX customers’ assets in the unlikely event of a security breach. The fund, starting with an allocation of 50 crore rupees (approximately $5.95 million), aims to set high security standards within the Indian crypto ecosystem.
Commitment to Security and Fund Management
CoinDCX plans to contribute 2% of its brokerage income annually to the CIPF, with a commitment to review and potentially increase the fund size over time. Sumit Gupta, Co-Founder of CoinDCX, emphasized the additional layer of protection the fund provides during extremely rare security breaches. “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,” Gupta stated.
As a Financial Intelligence Unit (FIU) registered exchange in India, CoinDCX has also 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 measures to ensure our customers’ assets are protected at all times,” the company affirmed.
Ensuring a Secure Crypto Ecosystem
CoinDCX stressed that security breaches like the one experienced by WazirX are rare. The platform maintains a strong security posture with diversified assets under management (AUM) across multiple vaults, adding an extra layer of security. Gupta suggested that it would benefit the broader crypto ecosystem if other exchanges also established similar protection funds. “Nobody can assure 100% security,” he acknowledged, adding that it’s crucial to have measures in place to protect customers even if there’s a slight chance of a breach.
By establishing the CIPF, CoinDCX aims to bolster trust and confidence in the Indian crypto market, ensuring that customer assets remain safeguarded against unforeseen security threats.
