A Crypto Investor Protection Fund of INR 50 Crore Has Been Established by CoinDCX

Nitin Konde, Apoorva Bajj

Aug 9, 2024 — 3 min read

A Crypto Investor Protection Fund of INR50 Crore Has Been Established by CoinDCX

The Crypto Investors Protection Fund (CIPF) has been established with an INR 50 crore allocation, according to the announcement made by the Indian cryptocurrency exchange CoinDCX.

The business claims that in the exceedingly unlikely event of a security breach or other unfavorable occurrence, users will be compensated by the fund.

As stated in the release, a governance framework has been established to guarantee effective administration and transparency about the CIPF's credit and usage.

Adding an Extra Layer of Security

Sumit Gupta, one of the co-founders of CoinDCX, stated that the company places a high focus on privacy and safety.

According to him, the company makes significant investments in "top-notch" security standards and adheres to stringent security measures to guarantee that the assets of our customers are safeguarded round-the-clock.

"The assets under management at CoinDCX are diversified across multiple vaults ensuring an added layer of security," he further explained.

Wazirx’s Security Breach on the Backdrop

A significant security data breach occurred at the Indian cryptocurrency exchange WazirX a few weeks ago, which led to the theft of around $235 million worth of cryptocurrency assets. This new development comes after the incident occurred.

Subsequently, Cyfirma, which is based in the United States, discovered that the North Korean cyber outfit Lazarus outfit was responsible for this large crime.

From that point forward, the organization has been making efforts to retrieve the stolen assets; nevertheless, they have not been successful up to this day. WazirX had intended to socialize losses among users, however, they ultimately decided to abandon this strategy after receiving a significant amount of criticism from clients and the cryptocurrency community.

At this time, the company is looking for a capital injection and is collaborating with several authorities to retrieve a percentage of the funds that were lost by the clients.

Motivation Is the Key Driver for CIPF

As a further comment on the reasons behind the establishment of the CIPF, Sumit stated, "In the extremely unlikely event of a security breach or an adverse event, this dedicated fund will provide an additional layer of protection, ensuring that our customers' assets remain secure and intact regardless of the circumstances." In addition to growing the size of the pool over time, we have committed to contributing 2% of the broking income to the corpus.

"The size of the fund will continue to be monitored, and we will make sure that the balance is kept at a level that is sufficient to protect the assets of our users." In addition, he stated that the CIPF will be the first of its kind and a crucial step towards establishing trust in the Indian cryptocurrency ecosystem over the long run.