Key Takeaways
- The fund will not cover losses resulting from individual user errors, like password leaks.
- CoinDCX will be adding 2% of their brokerage income to this fund every month.
India-based crypto exchange CoinDCX has introduced a Rs 50 crore Crypto Investors Protection Fund (CIPF) to compensate users for losses from security breaches.
The fund, initiated from CoinDCX’s own cash reserves, is designed to provide a safety net for users. “We started with 50 crores from our own balance sheet,” said Sumit Gupta, co-founder of CoinDCX, in a media interview. He added that the exchange will be adding 2% of their brokerage income to this fund every month.
As per the official statement, CoinDCX plans to review and potentially adjust the contribution rate and fund size annually. “Every year, we will assess whether to increase the 2 per cent rate or the overall brokerage contribution”.
Reportedly, CoinDCX is among the first crypto exchanges in India to implement such a fund. “This initiative dedicates Rs 50 crore solely for customer protection,” Gupta explained.
However, Gupta clarified that the fund would not cover losses resulting from individual user errors, such as password leaks. The CIPF specifically addresses security breaches affecting the platform itself.
The latest development comes on the heels of another Indian crypto exchange WazirX facing an exploit of $230 million. Around 45% of the users on the platform were impacted by the stolen funds.
Crypto storage provider Liminal Custody stated its preliminary investigations show that one of the self-custody multi-sig smart contract wallets created outside of the Liminal ecosystem has been compromised resulting in the exploit. As per blockchain security firm Elliptic, North Korean hackers were likely behind the exploit.
