In the wake of a significant $230 million hack on the Indian crypto exchange WazirX, CoinDCX, India’s premier cryptocurrency exchange, has taken proactive measures to safeguard its users. CoinDCX has announced the establishment of a $5.9 million Crypto Investors Protection Fund (CIPF), aimed at compensating customers in the rare event of a security breach.
CoinDCX Introduces Crypto Investors Protection Fund
In light of the alarming security breach at WazirX, CoinDCX has established the Crypto Investors Protection Fund (CIPF), which is specifically designed to reimburse customers for losses incurred during rare security incidents. According to a press release sent to Cryptonews, the CIPF aims to set new standards for security within the Indian crypto ecosystem, ensuring that CoinDCX customers’ assets remain secure.
The CIPF will start with an initial allocation of 50 crore rupees, approximately $5.95 million. CoinDCX has implemented a governance framework to ensure transparent and effective management of the fund, which includes contributing 2% of its annual brokerage income to the CIPF corpus. The exchange plans to review and potentially increase the fund size over time to maintain adequate protection for its users.
Commitment to High-Security Standards
Sumit Gupta, Co-Founder of CoinDCX, emphasized the significance of the CIPF in providing an additional layer of protection for users in the unlikely event of a security breach. Gupta stated, “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.”
CoinDCX, a Financial Intelligence Unit (FIU) registered crypto exchange in India, has received ISO certification for its stringent security measures. The exchange prides itself on investing heavily in top-notch security practices and following robust measures to ensure customer assets are always protected.
A Call for Industry-Wide Security Measures
CoinDCX believes that security breaches like the one experienced by WazirX are rare but not impossible. The exchange has a strong security posture, with assets under management diversified across multiple vaults for added security. Gupta further suggested that the ecosystem would benefit if other exchanges also allocated funds for investor protection.
“Nobody can assure 100% security,” Gupta remarked. “However, ensuring customers remain protected even in the slightest chance of a breach is crucial.”