Bengaluru: Coindcx has confirmed a security violation of $ 44 million involving one of its internal operational accounts, marking the second largest piracy of known cryptography in an Indian exchange. The company has launched a recovery bonus of up to $ 11 million to trace funds and identify the officials. Although the loss is limited to the own treasure and assets of COINDCX customers, the incident has rekindled a careful examination on operational security on Indian cryptography platforms.This is the second major crypto security incident involving an Indian exchange, after the disclosure of Wazirx in 2022 of an exploit of $ 230 million. Previous violations on platforms such as Buyucoin have also raised concerns about security architecture and incident preparation. In each case, the underlying causes were operational failures specific to the platform-not regulatory gaps.However, the absence of a formal framework for violation disclosure, audit requirements or incident resolution protocols contributed to the unequal response of the industry. Although exchanges are now required to register with the financial intelligence unit (FIU) and to apply KYC standards, wider rules on the integrity of infrastructure, key management or exposure to the hot portfolio remain absent.“The regulatory clarity is absolutely urgent, in particular for manufacturers working in the infrastructure and protocol layers,” said Aishwary Gupta, a world payroll manager at Polygon Labs, the blockchain developer who recently joined Reliance to launch Jiocoin. “We need a regime where innovation in good faith is protected and not penalized,” he added.In response to this political vacuum, emerging and black public policy advisers published a discussion document on Monday called The Coins Act on Monday, aimed at skipping dialogue around cryptography regulations. The proposal, supported by the members of the Bharat Web3 Association, suggested voluntary recording, sand environments for startups and clearer application standards.
