CoinDCX one of the largest Crypto exchanges said in an official statement the firm has set aside Rs 50 crore for the Crypto Investors Protection Fund or CIPF to cover losses that investors suffer due to security breaches. The move follows after Indian-based cryptocurrency exchange WazirX lost $230 million to cyber theft.
The company also said that it planned to add 2% of its brokerage income to the corpus of this initial fund and the size of the fund would grow from time to time. It has established the fund through capital expenditure in which the company has released Rs 50 crore from its pool of cash.
CoinDCX will adopt a customer compensation fund, making it one of the few exchanges in India to offer the facility.
Sumit Gupta, CoinDCX Cofounder, stated that this is the first of its kind where CoinDCX is taking that first step which is to set aside Rs 50 crore from the company’s corporate funds exclusively for the safeguard of customer funds. This will reassure the investors that the company shall make good any losses the investors may incur as a result of security breaches, among other mishaps, he also pointed out.
Gupta also highlighted that the fund is not meant to accommodate losses arising from slips at the customer’s end such as password theft, among others.
The announcement of the fund comes as the crypto investors have raised the concern of not getting their investments protected on the Indian crypto exchanges after the WazirX heist.
The action also follows WazirX’s initial move to ‘socialise the losses’ or to spread the loss of the funds among its clientele. Gupta’s tweet on X, formerly Twitter, confirms tha same, “The first contribution to losses should ALWAYS come from the company (i.e. WazirX in this case) and the treasury and assets the company holds. I have not seen any such commitment around this from the company side, instead making customers directly absorb the 45 per cent losses is utter nonsense.”
