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CoinDCX launches $6m customer protection fund following WazirX hack

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1 month ago

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Crypto exchange CoinDCX has established a $6 million contingency fund in a bid to protect customer assets as the Indian crypto market struggles to recover from the aftermath of the $230 million WazirX hack.

A press release shared with crypto.news stated that the ‘Crypto Investors Protection Fund’ will act as a safety net to compensate for user losses in the event of a security breach or other unforeseen circumstances that could put customer funds at risk.

“This dedicated fund will provide an additional layer of protection, ensuring that our customers’ assets remain secure and intact,” said Sumit Gupta, co-founder of CoinDCX.

With an initial allocation of 50 crores, approximately $6 million, CoinDCX will continue to inflate the fund’s size by committing 2% of its brokerage income over time. According to Gupta, the fund will be monitored continuously and subject to annual reviews to ensure its viability. 

Further, the company has established a governance framework to manage the fund’s credit and utilization while keeping the process transparent. 

The establishment of the CIPF comes shortly after WazirX, which housed the lion’s share of Indian cryptocurrency investors, got hacked for over $230 million. The incident left the exchange devoid of 45% of its customer assets and the ability to maintain a 1:1 collateral.

To calm the nerves of its customers, the exchange proposed what it called a socialized loss strategy that would allow users immediate access to 55% of their assets, but the remainder would be locked in Tether’s USDT.

However, the plan backfired, as crypto investors perceived it as unfair and an attempt to avoid full responsibility for the losses. Ultimately, the exchange had to abandon the plan.

Contingency funds like the CIPF are not new in the cryptocurrency sector, which has been bombarded by cyber attacks since its inception. With such attacks showing no signs of slowing down, several major crypto exchanges have established similar funds as a lifeline.

For instance, Binance established the Secure Asset Fund for Users in 2018, where it allocates a portion of its trading fees. Similarly, crypto exchange HTX introduced a 20,000 BTC reserve fund in 2019, while OKX has a fund called Risk Shield, where it allocates a portion of its revenue. 



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WazirX To Open Withdrawals On August 26

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4 weeks ago

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August 23, 2024

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WazirX, one of India’s largest crypto exchanges, has provided a crucial update on the status of user withdrawals. It also outlined the next steps in tackling the hack fiasco. The July 18 attack, which saw hackers make off with $230 million worth of ERC-20 tokens, had forced the platform to suspend withdrawals and trading. However, the exchange will resume withdrawals next week, according to a latest release.

WazirX Offers Update On INR Withdrawals

In a move that will likely bring some relief to its users, the exchange has provided an update on the status of INR withdrawals, which have been frozen since the cyberattack. The platform has announced that starting from August 26, 2024, it will begin to lift the suspension on INR withdrawals in a phased manner.

This decision comes after a careful assessment of user feedback and the current situation. WazirX has assured its users that the INR reserves, managed by Zanmai Labs Pvt Ltd, the entity responsible for INR-related activities on the platform, remain secure.

However, the Indian crypto exchange has clarified that not all INR balances are currently available for withdrawal. Approximately 34% of these balances have been frozen by law enforcement agencies (LEAs) due to ongoing investigations into third-party entities.

These frozen funds are not linked to any wrongdoing by Zanmai Labs, which the exchange emphasizes is not a target of these investigations. To manage the withdrawal process effectively, the Indian exchange has outlined a phased approach:

  • From August 26 to September 8, 2024: Users will be able to withdraw up to half of the available 66% of their INR balances.
  • From September 9 to September 22, 2024: Users will be able to to withdraw the full 66% of their INR balances.

In addition to this phased withdrawal plan, WazirX has announced a reduction in withdrawal fees by 60%. This brings the fee down from INR 25 to INR 10. This fee reduction is intended to ease the withdrawal process for users as they regain access to their funds.

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Kritika Mehta

Kritika boasts over 2 years of experience in the financial news sector. Currently working as a crypto journalist at Coingape, she has consistently shown a knack for blockchain technology and cryptocurrencies. Kritika combines insightful analysis with a deep understanding of market trends. With a keen interest in technical analysis, she brings a nuanced perspective to her reporting, exploring the intersection of finance, technology, and emerging trends in the crypto space.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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McDonald’s Instagram Compromised, Hacker Promotes Solana Meme Coin

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4 weeks ago

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August 21, 2024

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Fast-food chain McDonald’s suffered a breach on its Instagram account with bad actors promoting a Solana-based meme coin. The company’s marketing director also made a related post on his X (formerly Twitter) account suspected of being hacked. Users bemoan the frequent crypto-related scams in the market citing a drop in sentiments.

McDonald’s Instagram Hacked 

The Instagram account of McDonald’s suffered a hacking incident that saw the bad actor posting a Solana meme coin, GRIMACE. The hacker claimed that the company issued the meme coin on Solana sparking diverse community reactions. The value of the asset spiked within the hour of the post before losing momentum subsequently. 

Furthermore, Guillaume Huin, the fast food’s Marketing Director also made a related post on X about the GRIMACE token. The hacker further urged users to drop their Instagram handles to get followed back by the company’s official account.

“If you’re a holder of $GRIMACE, drop your Instagram handles below, and we will follow you on the official McDonalds account. We love and appreciate all the support of Grimace.” 

Both posts on Instagram and X have been deleted signaling restoration of the platform’s social accounts. This year, Solana meme coins have notched uphill momentum around the token fueled by the wider market drive in Q1 2024. The growth of these tokens has seen a sharp spike in smaller tokens as users move to make quick gains. However, the general market sentiments affect meme coins leading to price falls in bear markets. 

Hackers Claim $700,000 

Sequel to the incident, the hackers changed the McDonald’s Instagram account bio informing users of the rug pull stating they made $700,000 worth of SOL. Several crypto users criticized the bad actors noting that these moves attract a negative light to the crypto ecosystem.

The crypto market has faced multiple phishing attacks and other forms of scams with social media accounts of top platforms targeted. Due to these, global regulators have taken a tough stance on the market leading to widespread lawsuits against crypto firms to protect investors.

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David Pokima

David is a finance news contributor with 4 years of experience in Blockchain Technology and Cryptocurrencies. He is interested in learning about emerging technologies and has an eye for breaking news. Staying updated with trends, David reported in several niches including regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David goes cycling and horse riding.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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WazirX shifts funds to new multisig wallets, cuts ties with Liminal after $230m hack

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1 month ago

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August 15, 2024

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Indian crypto exchange WazirX, which suffered a $230 million hack in July, has said it is moving customer funds to new multi signature wallets and ending its relationship with crypto custody provider Liminal.

In an X post on Aug. 14, updating customers on the aftermath of the attack, the exchange said it was moving its remaining assets from Liminal to new multisig wallets to ensure their “maximum security.”

In a post-mortem report published soon after the attack, the Mumbai-based exchange explained that its multisig wallets needed a set of signatures from three members of its team and another from crypto custody service provider Liminal in order to verify a transaction. 

However, according to the exchange, attackers took advantage of a discrepancy between the data displayed on Liminal’s interface and what was actually contained in a transaction, allowing them to transfer control of the wallet to themselves.

The attackers then stole more than $230 million in various cryptocurrencies, including Ethereum (ETH), Shiba Inu (SHIB), Polygon (MATIC), and Pepe (PEPE). The lesser tokens were swapped into ETH, bringing the total haul to more than 59,000 ETH. 

The attack limited the exchange’s ability to maintain a 1:1 collateral with its assets, forcing it to halt both crypto and fiat withdrawals.

Liminal has since stated that its infrastructure was not breached and that all wallets in its custody, including those of WazirX, were safe.

However, in its latest update, WazirX maintained its stance that Liminal’s systems and interface had been compromised in the July 18 exploit, thus necessitating the precaution. It, however, gave no exact timeline as to when the wallet migration would be completed, only stating that it would publish a list of all the new addresses once it was done with the exercise.

Following the exploit, WazirX had tried to institute a “socialized loss strategy,” which would have seen users access 55% of their funds with the remaining 45% held by the exchange in Tether (USDT) equivalent tokens.

However, the proposal was met with widespread outrage, with users accusing the exchange of trying to avoid taking full responsibility for the losses incurred from the hack. Subsequently, WazirX was forced to backtrack on the plan, asking for more time to work on a resolution.





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