CoinDCX absorbs $16 million loss due to internal process failure

[Munshi Prem Chand]

Mein scrolling kar raha tha ky mujhy ye news mili. CoinDCX has confirmed reports that the exchange lost funds after some customers continued to send crypto to a retired deposit address.

The exchange first denied reports that a wallet was breached but later admitted that the reports were accurate. CoinDCX said that it lost the funds and that customers will not be impacted.

While CoinDCX said that some customers did continue to send funds to an old deposit address, the exchange sweeping service didnt work properly for some time. CoinDCX said that the wallet was compromised in a 2025 security incident and that the funds in question were supposed to be swept from the compromised address to the exchange main wallet. CoinDCX said that it incurred a loss of approximately $16 million because its internal sweeping service failed.

The exchange said that customer balances and trading are unaffected, and that customers who deposited funds to the exchange active wallets are also not impacted in any way. CoinDCX said that it has incurred the loss in question.


https://www.coindesk.com/markets/2026/10/26/coindcx-absorbs-usd16-million-loss-from-internal-process-failure-tied-to-retired-wallet

[eaLiTy]

~
While CoinDCX said that some customers did continue to send funds to an old deposit address, the exchange sweeping service didnt work properly for some time. CoinDCX said that the wallet was compromised in a 2025 security incident and that the funds in question were supposed to be swept from the compromised address to the exchange main wallet. CoinDCX said that it incurred a loss of approximately $16 million because its internal sweeping service failed.

CoinDCX lost $44 million in 2025, and now they have lost another $16 million after initially denying the hack. Since the information is public, it looks like they were forced to come clean about this loss.

It looks like a serious security breach caused by sending tokens to the already hacked wallets which is ridiculous to say the least.

The exchange said that customer balances and trading are unaffected, and that customers who deposited funds to the exchange active wallets are also not impacted in any way. CoinDCX said that it has incurred the loss in question.

If they are losing this much money every year, how are they going to survive.

I saw a statement from Tether confirming they identified the stolen assets and have frozen around $2 million USDT across the hacked accounts. Hopefully, they can recover the rest of the funds.

[Cointikka]

^^ Bhai kuch nahi hoga. Ye log hum ko lootenge aur jab time aayega ye log Dubai chale jayenge. I do not remember the name of that exchange but everyone suspects it was an insider who looted everything. They went to some country to show that they are not a threat to Indian crypto. The owner is living in Dubai, he did portray before he left that he sold his exchange to Binance.

Next, Binance came out and said they had not. This is a true scam, and so is CoinDXC.

I remember the owner was interviewed by some national media channel. I also remember that the owners became a unicorn startup. I may be wrong, but this startup culture is now becoming a scam culture.

[Munshi Prem Chand]

...

Tether has suffered operational risk control losses of $44 million in 2025, and the recently frozen $2 million is a good sign, but it remains unknown how much can be returned.

If Tether’s operational risk control problems continue, they may shake the market’s long-term trust in it.

This time another $16 million involved, and this large amounts concentrated within a limited period of just two years, the absorption pressure is undoubtedly enormous.

...

In the startup world, growth is often prioritised over robust processes or controls. CoinDCX incident could be one such case, where company claims it bore the losses this time around and that active users funds are safe. But such incidents dent the confidence of users, especially when losses are recurring.

There are cases in the past where exchanges have run into issues and owners have subsequently moved to foreign countries.

[Cointikka]

In the startup world, growth is often prioritised over robust processes or controls. CoinDCX incident could be one such case, where company claims it bore the losses this time around and that active users funds are safe. But such incidents dent the confidence of users, especially when losses are recurring.

There are cases in the past where exchanges have run into issues and owners have subsequently moved to foreign countries.

Startups are a good way to increase employment & giving boost to our economy. But lately, this startup culture is becoming a sham. Only 10 to 20% of 100% startup are successful, as per this news. Most upcoming entrepreneurs who do get selected in campus placements or are part of an okayish company use this method to pump their living standard. The government does not have any laws like in the US, where these failed startup guys can face a prison sentence. For example, the recent attack on Hugging Face by OpenAI bots/AI agents could have become a felony if it were done by a hacker group.

In reality, nothing happened and OpenAI, which is again a startup, is still functioning without any issues. That is the reason why there has been a surge of discussion asking the US government to come up with a law or governance for AI

[Munshi Prem Chand]

...

There are thousands of recognised startups that have already shut down. In the early stage of a startup, poor product-market fit and funding challenges are the most common reasons for failure.
But should we also not question the level of accountability and control that founders in India take? In most cases of business failure (fraud and negligence excluded), there is limited personal liability for the founders, owing to which they are protected from the consequences. There are systems where if there are repeated lapses in process controls, or user funds are at risk, stronger action can be taken.
This is the issue that keeps coming up time and again with cases like CoinDCX, where while growth is the focus, the cost of control lapses is borne silently, and life goes on. Absent greater clarity on accountability, this will continue to happen.

[henmark]

There are thousands of recognised startups that have already shut down. In the early stage of a startup, poor product-market fit and funding challenges are the most common reasons for failure.
But should we also not question the level of accountability and control that founders in India take? In most cases of business failure (fraud and negligence excluded), there is limited personal liability for the founders, owing to which they are protected from the consequences. There are systems where if there are repeated lapses in process controls, or user funds are at risk, stronger action can be taken.
This is the issue that keeps coming up time and again with cases like CoinDCX, where while growth is the focus, the cost of control lapses is borne silently, and life goes on. Absent greater clarity on accountability, this will continue to happen.

Startups are meant to fail because they are testing an unproven business methodology. Not every startup is going to be successful. Here in India, we are now seeing a rising wave of entrepreneurs and almost everyone has that mentality to start a business someday. I think shows like shark tank India have really motivated the youth as we can see even regular businesses like a cloud kitchen are making crores of revenue each year. That motivates others but it does not assure that the startup is going to boom.

The challenges you mentioned are just a handful. Resource and people management is one big concern in these startups. People here are happy to start their own business but will never give their best when it comes to other's business. Your employees are always going to find some run around to cut short the hard work.

[Munshi Prem Chand]

...

Resource and people management are big challenges for most founders. It can be tough to get the right people in place but keeping them motivated during a period of instability can be even more challenging.

Many Indian startups have a strong initial team that join because they are excited about the project but when the reality hits and the salary doesn’t match some bigger companies, motivation begins to wane. Founders will often do half the job themselves whilst also trying to raise the next round.

While Shark Tank has made starting a business sound exciting, there are many people entering the market unprepared for the operations side of running a business. This is rarely shown.

[Cointikka]

Resource and people management are big challenges for most founders. It can be tough to get the right people in place but keeping them motivated during a period of instability can be even more challenging.

That might be the reason why startups are hiring people on skills and not on the degree they have.

Many Indian startups have a strong initial team that join because they are excited about the project but when the reality hits and the salary doesn’t match some bigger companies, motivation begins to wane. Founders will often do half the job themselves whilst also trying to raise the next round.

They start in college, and most of them are college friends. It is a joint effort in developing their company cause the dream was incubated while they were in their hostel rooms. 

While Shark Tank has made starting a business sound exciting, there are many people entering the market unprepared for the operations side of running a business. This is rarely shown.

I never watched any episode of the copied version in India. I have come across some YT videos wherein these Sharks have declined many entrepreneurs who have grown their business tenfold. Most Sharks are not in profit now, but it is a given fact that a 10 years time frame is always used to evaluate investment growth or decline. I assume this show is still young maybe in the future their investment will gain profits.

[pawanjain]

Why does it feel like this could be an insider job? The wallet was compromised in 2025 and the funds were still present in the same wallet ?
Their sweeping service failed ? Isn't it too many coincidences to label it as a breach. I think these companies deliberately do it to evade taxes.
So I strongly think it as an insider job.

[Munshi Prem Chand]

....

It is more common now to hire based on skill rather than degree. In start-ups especially early stage, you want people who can get stuff done quickly. While having a degree can be beneficial, the core tech and product roles are focused on practicality.

Starting a company with friends from college can be an advantage but also a disadvantage. You will have high trust but once money, equity and decisions come into play it can cause issues. This is where many start-ups fail.

The Indian version of Shark Tank feels like more of an entertainment show. Sometimes they can be pretty brutal with their rejections. It will take 7-8 years to see if these investments pan out. At the moment it is still quite early.

....

There is always the chance an in-house conspiracy could have happened, however there is no real evidence unless we assume that the 2025 compromised wallet was still active and then suddenly moved. This does seem suspicious.

The idea that companies would do this on purpose for tax reasons seems extreme. The chances of them getting caught and losing their whole business are far greater than any tax saving.
 Once the investigation gets underway more details will be revealed.

[TSen]

....

It is more common now to hire based on skill rather than degree. In start-ups especially early stage, you want people who can get stuff done quickly. While having a degree can be beneficial, the core tech and product roles are focused on practicality.

Starting a company with friends from college can be an advantage but also a disadvantage. You will have high trust but once money, equity and decisions come into play it can cause issues. This is where many start-ups fail.

The Indian version of Shark Tank feels like more of an entertainment show. Sometimes they can be pretty brutal with their rejections. It will take 7-8 years to see if these investments pan out. At the moment it is still quite early.

Still in the end, you will need a degree to get hired. Even I was under the impression that skills can get me through but they do not even get us till the interview. Employers and even startups mostly look for candidates with relevant degree and the ones without degree are left behind. Only once in a while, any of these employees can actually get hired. Our parents have always forced us to get a university degree and they were not wrong. In India, there is actually no respect without a degree.

I would never start a company with any of my friends or family. Business will only worsen our relations because when it comes to money, our inner greed will come into picture and small fights will start taking place. These small fights will someday be a reason for a huge fight.