CoinDCX Confirms $16M Crypto Theft After Initially Denying Hack Reports

Indian cryptocurrency exchange CoinDCX has officially confirmed a $16 million theft from its platform, reversing its earlier public stance that suspicious fund outflows were merely a false alarm. 

The admission of the CoinDCX hack came after mounting pressure from on-chain investigators who exposed the movement of funds from the exchange's retired wallet infrastructure.

Key Takeaways

• CoinDCX confirmed a $16 million loss from retired wallets.
• An automated sweeping process failed to secure user deposits.
• The exchange promises all user funds in cold storage are safe.

The Timeline of the CoinDCX Hack 2026

The events leading to the confirmation of the CoinDCX hack 2026 began on a Tuesday when blockchain analysts noticed unusual activity. 

Darcy, the co-founder of asset rescue service FlashRescue, flagged that roughly 15.99 million USDT and a small amount of TRX were moved from a hot wallet and several deposit addresses to a single Tron address. 

The funds were subsequently split and routed to exchanges like Binance, OKX, and Gate.

Initially, CoinDCX leadership strongly denied the reports. CEO Sumit Gupta took to social media to call the claims incorrect and labeled the incident a false alarm. He suggested that hackers were simply reusing old wallet addresses compromised in a previous incident.

However, the exchange's narrative quickly unraveled when prominent on-chain investigator ZachXBT challenged the denial. 

ZachXBT pointed out that one of the flagged addresses was actively used by a liquidity provider for ten months after the previous hack and was sweeping user deposits to the exchange's current hot wallet as recently as April and May 2026. 

Faced with the evidence, CoinDCX published a blog post on Sunday confirming the loss.

Read also: Uniswap v4 Aggregator Hooks Launch: Turning Competitor Routing Fees Into UNI Burns

How the CoinDCX Security Breach Occurred

According to the exchange's official statement, the CoinDCX security breach was tied to its old operational wallet infrastructure. These addresses were originally compromised during a major security incident in July 2025 and were officially deprecated as a result.

Despite being retired, some users mistakenly continued to deposit funds into these old addresses. CoinDCX stated that it credited those users' portfolios the moment the funds arrived. 

A secondary automated service, known as sweeping, was designed to move those funds from the deprecated address into the primary CoinDCX wallet. However, this sweeping process failed for a particular period.

This failure allowed deposits to accumulate in the vulnerable address, eventually leading to the theft of 15.99 million USDT. The company stated that it has absorbed this loss. 

The blog post did not explicitly call the event a hack, nor did it identify the perpetrators behind the irregular fund movement.

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Is CoinDCX Safe? Reassurances and Pushback

When asking if CoinDCX is safe, users are faced with conflicting messages from the company and independent investigators. CoinDCX maintains that all user funds remain secure. 

The exchange emphasized that the majority of assets are held in segregated cold wallets, protected by multi-layer custody and offline security controls. They also noted that regular trades, deposits, and withdrawals are operating as usual.

Conversely, ZachXBT has advised users to withdraw all funds from the platform if they value their assets. The investigator criticized the exchange's leadership for publicly and privately denying the theft, stating they either lied or were negligently incompetent.

This latest incident brings the total losses for CoinDCX from recent security events to nearly $60 million. The July 2025 hack alone cost the exchange approximately $44 million. 

Authorities later revealed that hackers posed as recruiters to trick a CoinDCX software engineer into installing malware on a company laptop, granting access to internal systems.

Beyond security issues, the exchange has faced legal challenges. In March, Indian police arrested the co-founders over a fraud complaint, which the exchange claims stemmed from scammers impersonating the platform via a copycat site. 

Despite these hurdles, major industry players continue to back the company. Coinbase invested in CoinDCX in October 2025, valuing the exchange at $2.45 billion.

Read also: ZachXBT Zcash Investigation: How Stolen Crypto Flows Into ZEC Shielded Pools

FAQ

What happened to CoinDCX?

CoinDCX confirmed a $16 million loss after an automated system failed to move user deposits out of a retired and vulnerable wallet.

Did CoinDCX deny the hack initially?

Yes. CEO Sumit Gupta initially called reports of the breach a false alarm before the exchange eventually confirmed the theft.

Are user funds safe on CoinDCX?

The exchange states that user funds remain safe in cold wallets and that it has absorbed the financial loss. However, on-chain investigator ZachXBT advised users to withdraw their assets.

Who is ZachXBT?

ZachXBT is a well-known on-chain investigator who challenged CoinDCX's initial denial and provided evidence that the compromised addresses were still in active use.

How much did CoinDCX lose in the July 2025 hack?

The previous hack cost the exchange approximately $44 million, bringing the combined losses from both incidents close to $60 million.

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