CoinDCX Launches Investor Protection Fund
CoinDCX, India’s largest cryptocurrency exchange, has taken a significant step to enhance investor trust by establishing the Cryptocurrency Investor Protection Fund (CIPF). The fund, with an initial allocation of Rs 50 crore, aims to compensate users in rare instances such as security breaches or adverse events.
This move by CoinDCX comes in the aftermath of a cyberattack on another major Indian exchange, WazirX, which led to the loss of $230 million – nearly 45% of its customers’ funds. Reports have linked the attack to the North Korean hacker group Lazarus.
Building Trust in the Crypto Ecosystem
By creating the Cryptocurrency Investor Protection Fund, CoinDCX emphasizes its commitment to fostering trust within the crypto ecosystem. Sumit Gupta, co-founder of CoinDCX, highlighted the importance of ensuring clients’ assets remain safe and intact, especially in the face of unforeseen events.
Gupta also mentioned that a portion of brokerage revenue will be added to the fund, with plans to increase its size over time. CoinDCX continuously monitors the fund’s balance to maintain adequate protection for user assets.
Assets managed by CoinDCX are stored across multiple vaults to enhance security measures and safeguard against potential risks.
WazirX Recovery Efforts
Following the cyberattack, WazirX has been actively working to recover the stolen funds and restore investor confidence. The exchange recently filed a first information report (FIR) regarding the theft, marking a step towards addressing the incident.
WazirX introduced a bounty program to incentivize individuals with valuable information that could help recover the frozen funds. Additionally, plans to socialize losses were met with criticism and ultimately shelved.
Despite challenges, WazirX CEO Nischal Shetty remains optimistic and is exploring partnerships with global exchanges for support and potential solutions.
The establishment of the Cryptocurrency Investor Protection Fund by CoinDCX sets a positive precedent for investor protection in the Indian crypto space, signaling a proactive approach towards mitigating risks and enhancing trust among users.
The post Rival CoinDCX Forms Rs 50 Crore Investor Protection Fund After WazirX Cyber Attack showcases the industry’s commitment to safeguarding investor interests and reinforcing the resilience of cryptocurrency exchanges in the face of emerging threats.
