CoinDCX, India’s largest cryptocurrency exchange by trading volume, said it will absorb a loss of $15.99 million after a failed internal process left customer deposits in a retired wallet linked to a 2025 security breach. The Mumbai-based platform initially rejected reports of suspicious transfers as a false alarm, but later acknowledged that funds had continued to arrive at deprecated addresses and were not moved as intended.
How the loss emerged
The issue came to light after blockchain investigators reported approximately $16 million in unusual outflows from wallets associated with CoinDCX. Chief Executive Sumit Gupta initially described the reports on X as a false alarm.
CoinDCX subsequently told CoinDesk that the addresses identified by investigators were old wallets created in January 2025. The exchange said those wallets had been compromised during a security incident in July 2025, which resulted in losses of about $44 million, and had not been used since.
That account was challenged by ZachXBT, an on-chain investigator. He said at least one address, identified as TQKJQ, had remained in use by a liquidity provider. According to his findings, the address swept user deposits into CoinDCX’s current public hot wallet as recently as April and May 2026.
CoinDCX addressed the activity in a blog post published on Sunday. It said TQKJQ formed part of its former operational wallet infrastructure and confirmed that the financial impact was connected to that wallet.
The exchange did not describe the event as a new hack. Its explanation also did not identify who was responsible for the irregular movement of funds or explain precisely how it occurred.
What failed inside the exchange
CoinDCX said some customers continued to send deposits to addresses that had been retired after the 2025 breach. The exchange credited those deposits to the customers’ portfolios when the funds reached the deprecated wallets.
A separate automated process, known as sweeping, was supposed to transfer the deposits from the old addresses into CoinDCX’s primary wallet. That process failed during a particular period, allowing funds to build up in the deprecated wallet instead of being moved to the intended destination.
The resulting loss amounted to 15.99 million USDT, a dollar-pegged cryptocurrency known as a stablecoin. CoinDCX said the company would absorb the entire amount.
The distinction between customer balances and the company’s loss is central to the exchange’s account. CoinDCX said customer balances were not affected, and that its active wallets and trading systems also continued to operate normally. It added that user funds remained in segregated cold wallets protected by multiple custody layers and offline security controls. Cold wallets are designed to remain disconnected from the internet, reducing their exposure to online attacks.
The company’s statement did not clarify whether the old addresses were compromised again or whether the suspicious outflows reflected another type of unauthorized access. CoinDesk contacted CoinDCX for further clarification on that question.
Disclosure and current market picture
CoinDCX acknowledged that its response took time. The exchange said it needed to conduct a detailed review of the deprecated infrastructure and establish the sequence of events before issuing its explanation. It also conceded that it could have been more proactive, while saying it released the update once it had what it considered a complete picture.
The episode highlights the operational risks that can remain after a wallet has formally been retired. Even when an exchange stops using an address, customers may continue sending funds to it, creating a need for reliable monitoring and recovery procedures. In this case, CoinDCX said the customer accounts were credited, but the failed transfer mechanism left the company exposed to the resulting loss.
Moneyiar market data at 22:38-22:39 on October 25, 2026, showed a generally weaker picture among the listed digital assets:
- Celestia (TIA): $0.5321576029, unchanged over 24 hours and down 11.85% over seven days.
- BAS (BAS): $0.0169243841, down 1.24% over 24 hours and 7.19% over seven days.
- Walrus (WAL): $0.0343190471, down 0.3% over 24 hours and 11.97% over seven days.
- Flow (FLOW): $0.0264746028, down 2.72% over 24 hours and 10.07% over seven days.
The CoinDCX disclosure therefore concerns a specific wallet-management failure and a company-funded loss, while the exchange maintains that customer funds, active wallets and trading systems were unaffected.
