CoinDCX has stated that it had a loss exceeding $44 million due to an attack on one of its internal operational accounts. This incident marks the second-largest known hack of an Indian cryptocurrency exchange. Although, according to the company, the assets of customers were not affected, it introduced a recovery bounty of up to $11 million to assist in tracking and recovering the stolen funds.
The hack that targeted the treasury of the exchange is not the first of its kind on Indian platforms. In 2022, WazirX had already announced an exploit of $230 million. In recent years, BuyUcoin has also experienced hacking incidents. Most cases have underlined the inadequacies in operational risk safeguarding, though most are not as a result of regulatory lapses.
The crypto industry in India does not have an official incident response plan. At this moment, there are no binding procedures concerning the reporting of hacks, external audits, or after-incident recovery. This gap has created variable reactions industry-wide.
Although the platforms need to register with the Financial Intelligence Unit (FIU) and exercise Know Your Customer (KYC) regulations, no particular laws govern hot wallets, infrastructure integrity, or the protection of private keys. Consequently, exchanges have widely different internal security policies.
A number of blockchain leaders have spoken out in favor of more specific legal direction to cover infrastructure-level risk. Aishwary Gupta, Global Head of Payments at Polygon Labs, stated that it is time to have well-regulated clarity. According to him, both developers and infrastructure developers need a system where the innovators can work without fear of reprisal.
A proposal by Hashed Emergent and Black Dot Public Policy Advisors was published as the COINS Act to fill the policy vacuum. The report suggests optional registration of crypto startups, regulatory sandboxes that will promote compliance-seeking innovation, and more explicit enforcement criteria. The proposal is backed by entrepreneurs of the Bharat Web3 Association who want to resume a meaningful debate on crypto legislation in India.