CoinDCX has announced the establishment of a Rs 50 crore (about $5.9 million) Crypto Investors Protection Fund (CIPF). This initiative aims to compensate users for losses resulting from security breaches on the platform.
The announcement comes in the wake of a recent cyberattack at another local crypto exchange, WazirX, which resulted in the loss of $230 million. CoinDCX’s proactive approach seeks to boost investor confidence in the coutnry’s crypto market.
Sumit Gupta, the co-founder of CoinDCX, revealed to Business Standard that all of the starting funds come directly from the exchange’s balance sheet and reserves. “We’ve allocated Rs 50 crore from our own funds. Moving forward, 2% of our brokerage income will be added to this fund each month,” Gupta stated.
The crypto exchange plans to grow the CIPF over time, with a commitment to reassess the fund’s size and contribution rate annually.
“Each year, we will evaluate whether to increase the 2% rate or the brokerage contribution,”
Gupta added.
However, Gupta clarified that the fund would not cover losses from individual investor errors, such as password leaks or similar issues.
CoinDCX’s initiative marks a first for the Indian crypto industry, with the company being among the pioneers in establishing a customer compensation fund of this magnitude. The move is expected to reassure investors about the safety of their funds in the event of security breaches or other adverse incidents.
The launch of CIPF also aligns with broader efforts in the Indian crypto sector to enhance security and consumer protection in the wake of Waziri Hack. The Bharat Web3 Association (BWA) recently formed two task forces: one focused on improving cybersecurity through standard operating procedures and preventive solutions, and another dedicated to updating consumer protection guidelines.
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