Background on the Security Incident

CoinDCX, a prominent cryptocurrency exchange, recently provided insights into a security incident that transpired on July 19, 2025. The exchange reported that older operational wallet infrastructure was compromised during this incident, prompting CoinDCX to deactivate these addresses.

Continued User Deposits to Deprecated Wallets

Despite the deprecation of these wallet addresses, some users inadvertently continued to deposit funds into them. CoinDCX acknowledged this oversight, stating, “This wallet belongs to our old operational wallet infrastructure, which was compromised during the security incident we reported on July 19, 2025, and was deprecated as a result.” Upon the arrival of these deposits, affected users were credited the corresponding amounts in their portfolios.

Issues with Fund Movement Process

CoinDCX initiated a secondary service termed “sweeping” to facilitate the transfer of these accumulated funds from the deprecated wallets to the main CoinDCX wallet. Unfortunately, there was a temporary failure in this process, leading to a significant accumulation of deposits in the retired addresses.

The company reported an absorption of losses amounting to 15.99 million USDT due to this mishap. It’s important to note that the exchange’s blog post did not label this occurrence as a hack, nor did it disclose the parties responsible for the unusual fund movements.

User Funds Remain Safe

In response to inquiries about the security of user funds, CoinDCX reiterates its commitment to safeguarding assets. “We want to reiterate that all user funds remain safe in secure, segregated cold wallets, protected by multi-layer custody and offline security controls,” the exchange stated, emphasizing the security measures in place. Cold wallets are strategically maintained offline to enhance security.

Further Clarifications Sought

Following the incident, CoinDesk has reached out to CoinDCX for clarification on whether the old, deprecated addresses experienced another security breach or how the irregular movements of funds occurred.