It has been a while since the cryptography sector of India did the headlines (negative) and did not attract unwanted attention. Bitcoin recently reached a summit of all time of around $ 118,000 per Bitcoin, it seemed that everything in crypto was fine. But then the disaster struck.
On July 21, India’s cryptography sector was shaken when Coindcx, one of the country’s main cryptocurrency scholarships, confirmed a security violation that caused an amazing $ 44 million. Convert this, and it is more than RS 380 stolen crores. However, what stood out in official communication is the following: no user account was affected. So what was hacked exactly?
Don’t crypto exchanges use blockchain for transactions? Isn’t the blockchain supposed to be insufficient? And how did such a massive attack go unnoticed until the funds are drained?
Let’s try to break everything in this explanator.
Coindcx Hack: What happened?
On July 19, Coindcx underwent a cyber attack which led to a flight of approximately $ 44.2 million in cryptographic assets, including more than 155,000 soil (Solana) and 4,400 ETH (Ethereum). The news of the violation was revealed after several chain analysis companies like Cyvers reported a suspicious activity involving Coindcx portfolios.
As indicated, the stolen funds did not come from the client’s portfolios, but from an internal operational portfolio used by the exchange of liquidity supply -, in office, helping to facilitate gentle transactions between cryptographic pairs. You see, like banks, even crypto exchanges must keep money on the stock market to facilitate the transitions of customers gently. The hack occurred when the funds were quickly moved to blockchain and bleached networks using tools like Tornado Cash, a cryptographic mixer often used to obscure the origin of stolen assets.
Have user accounts been compromised?
The report also indicated that no customer account was affected by hacking. Coindcx has confirmed that: all customer funds remain safe and intact. The affected portfolio was strictly for internal operations, not user securities. The company has covered all of the loss using its corporate treasure. Coindcx offers a bonus of $ 11 million to any white heat hacker that helps recover the funds. As most customer funds are stored on cold wallets, which are not connected to the server, this specific separation has prevented a much greater crisis. CoindCX also immediately strengthened its backend infrastructure and started working with cybersecurity companies for forensic analysis.
So what was really hacked?
Let’s be clear about one thing – the blockchain was not hacked. Instead, the Backend systems that connect the Coindcx platform to the blockchain were compromised. Think about it like this: the safe (blockchain) is secure, but the lock on the door leading to the trunk room (the exchange software) has been left open or broken. Although it is not confirmed how the hacking has occurred, there are some possibilities that we can consider.
Most likely vulnerabilities:
- Disclosed or erroneous API keys which allowed unauthorized access to hot wallets.
- Inadequate access controls, which means that internal systems had excessive authorizations.
- Weaknesses on the server side where the malicious actors have acquired backend access.
According to the Safety Society of Cyvers Blockchain, the attack was “fast and sophisticated”, and the characteristics of the previous hacks allocated to the Lazare group, a collective of hacker linked to North Korea. On hacking, Coindcx also published a press note indicating that the incident involved a single internal operational account used for liquidity supply on an exchange of partners.
Can a blockchain be hacked?
This is where confusion occurs for most people. While the blockchain technology itself is designed to be highly secure and resistant to falsification, platforms built above (such as exchanges and bridges) can be hacked.
These are mainly in the form of decentralized financial applications and intelligent contracts, which are built on the blockchain. These are tools that help move the crypto from one blockchain to another. Without this, the move of the crypto is impossible. Here is a simple breakdown:
What can be hacked else?
Beyond the exchanges, several key components of the cryptography ecosystem are vulnerable:
- Smart contracts: If it is not properly audited, logical defects or uncontrolled inputs can be handled.
- Hot wallets: Users store crypto in these. These are constantly online, which makes it easy targets for malware, phishing or exposed private keys.
- Daycare portfolio services: Can be compromised by backend violations or threats of initiates.
- Blockchain knots: Rarely hacked, but vulnerable if it is poorly configured or executed obsolete software.
- Blockchain protocols: Extremely difficult to hack due to decentralization and consensus mechanisms. Millions of computers should be taken control.
- Transversal bridges: One of the most vulnerable and most targeted for their complexity and bad audits; The attackers exploit insects to drain the funds.
Hacked exchanges in the past
Coindcx is not the only exchange that has been hacked, and it is not even the greatest hacking so far. Here is a list of major hacks in the past. Major cryptocurrency exchange hacks:
- Wazirx (2024): Would have lost $ 230 million + when a third -party portfolio (Liminal) was compromised.
- Mt. Gox (2014): Lost 850,000 BTC, worth billions today, due to internal mismanagement and a long -standing security defect.
- FTX (2022): Technically, a diversion rather than a hack, but more than $ 400 million was stolen during its collapse.
And in 2025 only, it is estimated that pirates linked to North Korea would have stolen more than $ 1.6 billion in crypto via various attacks.
How do Indian exchanges secure user funds?
Despite the risks, Indian exchanges renowned such as Coindcx and Coinswitch follow several protective layers.
Safety measures in place:
- Cold wallets: Most user funds are stored offline, far from the internet. These cannot be hacked as long as the pirate has passwords of these wallets.
- Multi-Signature Access: No one can move funds unilaterally. You need signatures for several people to access user funds.
- Real -time monitoring: Automated systems detect unusual transactions and signal them. Third -party audits: regular checks on reserves and infrastructure.
- Compliance: All crypto exchanges recorded with the Financial Intelligence Unit (FIU) must immediately report incidents.
Even with these guarantees, the fact that these exchanges are executed and maintained by humans make it the weakest link. Despite strict firewalls, things like poorly configured systems to social engineering tactics make these exchanges vulnerable to attacks.
Why does that still matter
Coindcx piracy raises a critical question: who watches over the crypto in India? Unlike traditional banks, crypto exchanges in India operate in a regulatory gray area. There is no insurance if an exchange loses money. Even if your funds are safe today, there is no formal government organization to protect you in the event of total collapse.
And as the government has not officially recognized Crypto as a legal financial instrument, these platforms must self -regulate and absorb damage, as the Coindcx has done in this case. Despite this ambiguity, the Indians continue to put more money in crypto, given the success and a handful of people were able to derive from early investments.
Technology is secure, but systems can fail
Coindcx’s violation did not break the blockchain, nor steal everyday investors. However, it has exposed the vulnerabilities that exist between the user and the chain – infrastructure, access systems and operational processes.
Although the objective of this article is not on the fact that the crypto is dangerous, it is a reminder that even the strongest technology is as safe as the people and the platforms that manage it.
As the cryptography industry in India matures, the need for stronger regulations, better audits and consumer protection mechanisms has never been so urgent. Without forgetting that crypto exchanges in India must have systems in place that can predict and prevent hacks like these in order to protect the ecosystem.
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