CoinDCX, India’s first digital currency unicornhas expressed interest in taking over the ailing WazirX exchange, while the CoinSwitch exchange has initiated a $70 million asset recovery program to help WazirX users who lost funds due to the July 2024 cyber attack.
WazirX, once India’s largest digital asset exchange by trading volume, suffered a $235 million cyber attack last year and has struggled to recover ever since. North Korea’s Lazarus Group carried out the WazirX hack. This underscores growing concerns about the security vulnerabilities of global digital currency platforms.
The takeover offer, as well as the extension of financial assistance to WazirX users, comes at a time when India’s exchange of digital assets is likely looking at consolidationwith smaller exchanges either going out of business or merging with larger ones due to the country’s punitive tax system.
“We are closely monitoring developments and continue to consider various options, including taking over WazirX and working for the recovery of funds. However, the matter is currently sub judice, which limits our ability to take direct action until there is a clear decision from the Singapore courts , says Sumit Gupta, co-founder of CoinDCX, said in an X post.
“That said, should the WazirX team approach us, and subject to court/creditor approvals, we are willing to step in and help. We are even prepared to put in some capital from our own funds to help those affected users and help them recover their losses as much as possible,” added Gupta.
In July 2024, CoinDCX, India’s first digital currency unicornlisted The BSV token for trading on its platform, allowing users to have more ways to buy, sell and trade BSV. With CoinDCX’s close to 15 million registered users, the listing marks a significant expansion in the Indian market for BSV and demonstrates its potential and opportunity in the region.
“We are launching ‘CoinSwitch Cares’, a Rs 600 crore (about $70 million) recovery program to help WazirX users who lost funds due to the alleged July 2024 cyber attack,” Ashish Singhal, co-founder of CoinSwitch, said in an X post.
“CoinSwitch Cares is more than a recovery program – it is our commitment to build a safe and thriving crypto ecosystem in India…affected users can recover losses, earn rewards and re-enter the market with confidence through this community-focused initiative. Users can visit CoinSwitch Cares- portal (link in comments) to estimate recovery, deposit funds and claim rewards,” explained Singhal.
CoinSwitch is a product of PeepalCoa wealth technology products company. PeepalCo Group serves 19 million Indians and is backed by blue-chip investors, including Andreessen Horowitz (a16z) (NASDAQ: ZADIHX), Tiger Global, Ribbit Capital (NASDAQ: ZCFFJX), Paradigm and Coinbase Ventures (NASDAQ: COIN).
On January 15, Singhal said that users have already claimed losses worth Rs 1,000,000 ($11,575) as rewards for signing up through the CoinSwitch Cares program.
“We want more users to benefit from this program and recover their losses earlier. As users receive more rewards based on total trading volumes during the program, more users on this program means faster recovery,” said Singhal.
India, the world’s largest democracy, faces 30% flat tax on all digital currency income without provision to offset losses and a 1% tax is deducted at source (TDS) on all transactions above Rs 10,000 ($115). This could likely result in a loss of approximately $1.2 trillion in trading volume on domestic exchanges over the years, a study of the Esya Centre, an Indian policy think tank, argued.
Some global exchanges have been closed in India
While domestic exchanges have been everything more follows with new regulatory requirements, some of them global exchange of digital assets has shut down operations in the world’s most populous nation.
OKX with headquarters in the Seychelles switch off its India operations in 2024, citing regulatory hurdles.
Exchange of digital assets Village piece is the latest to “temporarily” halt its services to users in the fastest-growing major economy as regulatory pressure mounts.
“Due to the latest developments from Indian regulatory authorities and in continuation of previously implemented restrictions, we regret to inform you that as of January 12, 2025, 08:00 UTC, Indian users will temporarily be unable to open new trades or come ate some products on the Bybit platform. The only exception will be withdrawals, which will remain available for your convenience,” Bybit said in a statement.
Bybit said it will continue to work with the Indian regulator to complete its registration as a virtual digital asset service provider in India.
“We are committed to resuming full service as soon as we complete our registration process with FIU,” Bybit said.
The Financial Intelligence Unit-India, or FIU-India, the country’s anti-money laundering agency, launched its crackdown in December 2023 by issuing “compliance show cause” notices. to nine offshore cryptocurrency exchanges. The list included Binance, Bittrex, Bitfinex and KuCoin, which were accused of operating in India without a proper license. The government’s actions escalated with a demand for Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOGL) to remove the apps from these exchanges from their respective app stores.
However, the FIU re-recognized Binance and KuCoin after they registered with the agency as reporting entities. Binance is paid $2 million in penalties for non-compliance, while KuCoin rejoined after paying a $41,000 fine. Despite this, Binance faces other legal challenges, including a potential $86 million in fines from another regulatory body.
See: ‘Disruptive’ blockchain could be useful for India
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