CoindCX will be released again. Withdrawal resumes after $44 million violation

India’s biggest crypto exchange has returned online after a $44 million violation exposed blind spots on operational infrastructure.

Although the customer’s funds were not touched, the CoindCX hack is traced along tornado cash fund wallets, but still builds user trust with fresh questions about market transparency and wallet hygiene. Now fully operational, CoindCX is pledging to a stronger safeguard and bug bounty program to stay ahead of the next exploit.

ZachxBT IDS Attack

On-chain investigator ZachxBT first identified the attack about 17 hours before the exchange publicly revealing the case.

Zachxbt traced the attack to an address funded by Tornado Cash with 1 ETH. The attacker later filled funds stolen from Solana (SOL) to Ethereum (ETH).

Tel Aviv-based security company Cyvers has flagged suspicious withdrawals by reciting manual attribution as the affected CoindCX hot wallets do not have public tags and certificates for resolves.

Customer funds remain safe

CoindCX CEO Sumit Gupta said directly to the community that violations will not affect customer assets.

“Your client funds are not affected. Your assets are completely safe and protected by a secure cold wallet infrastructure,” Gupta said in his initial disclosure.

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The hacks affected internal management accounts that were used solely to provide liquidity to partner exchanges, rather than consumer deposit wallets.

“The incident was included immediately by isolating the affected operational accounts. The operational accounts are isolated from the customer wallet, so exposure is limited only to this particular account,” explained Gupta.

CoindCX Exchange restores full functionality

Following the security incident, CoindCX temporarily suspended certain operations while investigating the violation. The exchange has since restored all trading activities and the ability to withdraw INR without restrictions.

“Trades and INR withdrawals on CoindCX are fully operational and running smoothly. You can always withdraw INR without any restrictions,” Gupta announced. He urged users to sell panic, warning them that the rushing decision “often leads to lower prices and unnecessary losses.”

What’s next?

Exchange is working with partner platforms to block and recover stolen assets while implementing additional security measures.

CoindCX plans to launch a bug bounty program to encourage security researchers to identify potential vulnerabilities.

“Every security incident is learning, and we’ll learn and strengthen our platform,” Gupta said.