Cryptocurrency Exchange CoinDCX Creates $6 Million Customer Protection Fund
Date: 2024-08-07 Author: Gabriel Deangelo Categories: BUSINESS
Indian cryptocurrency exchange CoinDCX has announced a new $6 million Crypto Investor Protection Fund. The move comes in response to a series of issues in the cryptocurrency industry, especially after another major exchange, WazirX, was hacked, resulting in the loss of $230 million in assets. As a result of the incident, 45% of WazirX customers lost their funds, and the exchange itself struggled to maintain 1:1 collateral.
Goals and Objectives of the Fund
The primary goal of the new fund from CoinDCX is to ensure that users of the cryptocurrency exchange are protected in the event of a “security breach or other unforeseen circumstances.” This includes situations where customer funds may be at risk. Sumit Gupta, co-founder of CoinDCX, emphasized the importance of the new fund, saying that it will provide an additional layer of protection and guarantee the safety of client assets.
“Our special fund will provide an additional layer of protection, ensuring that our clients’ assets remain safe,” Gupta said.
The fund currently has an initial balance of $6 million, but CoinDCX plans to increase its size regularly. The exchange will invest 2% of its brokerage income into the fund. Gupta also added that the fund organization will be under constant control and managed according to a transparent system. This should ensure maximum security and transparency in asset management.
Examples of similar funds
CoinDCX’s initiative to create a client protection fund is not unique. In 2018, the cryptocurrency exchange Binance established its own Asset Security Fund for users. Similar organizations also exist at the HTX and OKX exchanges. These funds serve a similar purpose - to protect users from financial losses in the event of cyberattacks or other emergencies.
The creation of the CoinDCX Crypto Investor Protection Fund demonstrates the growing responsibility and commitment of exchanges to improve the security and protection of their customers. In the context of the instability and high risks associated with the cryptocurrency industry, such steps are becoming increasingly important to ensure trust and stability in the market.
