Exchanges have been scarce, liquidity was poor, and the language of blockchain nonetheless drew clean stares from bankers and regulators alike. Buyers dismissed it as a fad and founders operated within the shadows, uncertain whether or not what they have been constructing would even be authorized a month later.
A Reserve Financial institution of India’s (RBI) round in 2018 banning banks from working with crypto corporations arrived simply because the sector was starting to seek out its toes, forcing entrepreneurs to improvise in a single day.
Amid that haze, two Indian Institute of Know-how (IIT) Bombay graduates, Sumit Gupta and Neeraj Khandelwal, began CoinDCX in a Mumbai house, believing that India, one of many world’s fastest-digitizing economies, would finally want its personal gateway to the world of digital belongings.
It was an audacious wager made at a time when there was no playbook, no clear path to compliance, and no indication that crypto might ever go mainstream in India.
The golden period
Gupta and Khandelwal first met in Kota, the teaching hub, the place they have been making ready for engineering entrance exams, finally making it into IIT Bombay. They began CoinDCX, a cryptocurrency buying and selling trade, seven years in the past to make crypto accessible to Indians. The corporate earns cash largely from buying and selling charges, that are a small proportion of every commerce.
Quickly after the launch, nevertheless, the RBI imposed a banking ban on crypto transactions, limiting financial institution partnerships and fiat (cash issued by authorities) entry. In March 2020, the Supreme Court docket struck down the RBI ban, opening the market up once more. CoinDCX’s consumer base started rising; by February 2022 it had over 10 million customers.
The bull market of 2021-22 was a golden period for India’s crypto scene. CoinDCX and different exchanges rode a wave of retail curiosity and hovering digital-asset costs, which lifted their income to unprecedented ranges.
Each new itemizing and each market rally appeared to gasoline a frenzy of buying and selling, drawing in thousands and thousands of first-time traders. CoinDCX noticed its income leap to ₹589 crore that 12 months, from simply ₹47 crore in 2020-21.
For a quick second, the business felt unstoppable, as if the crypto growth had opened a doorway to limitless development. Using that wave, CoinDCX raised $90 million in Sequence C funding in August 2021, hitting a valuation of $1.1 billion and changing into India’s first crypto unicorn.
The corporate stood out as a breakout success story in India’s cryptocurrency universe. However that will quickly change.
Exit battles
After the highs got here a difficult part marked by regulatory probes and a cascade of trade failures. In India, the Enforcement Directorate opened investigations into a number of exchanges, together with CoinDCX and CoinSwitch, for attainable violations of anti-money-laundering and foreign-exchange guidelines.
Globally, the collapse of main platforms akin to FTX in 2022 illustrated how fragile the ecosystem had turn out to be. All of this dampened sentiment in India, killing investor curiosity.
Amid all this, the corporate has suffered a collection of setbacks. In 2023, CoinDCX undertook a restructuring drive to chop prices, shedding about 100 staff.
This 12 months, it has seen a number of senior arms go away. Former chief expertise officer Vivek Gupta left in June; vice chairman and head of authorized Tushar Tarun exited in July; chief human sources officer Mudita Chauhan give up in October, and senior vice chairman and head of knowledge safety Sridhar G. in September. The corporate has maintained that attrition is a pure a part of enterprise cycles.
The theft
Human sources issues apart, a giant theft 4 months in the past threatened CoinDCX’s monetary footing and its hard-earned credibility in an already fragile market.
On 19 July, attackers gained unauthorized entry to the corporate’s back-end programs and drained about $44 million from an inside liquidity pockets. The breach didn’t influence buyer accounts, which the trade stated remained secured. In response to investigators, the attackers hacked the system utilizing compromised credentials of an organization engineer whose work laptop computer had been contaminated with malware.
CoinDCX confirmed the incident on 20 July and stated it had remoted the affected pockets and launched a restoration programme, together with a 25% bounty for info that would assist retrieve the stolen funds.
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A cryptocurrency is digital cash secured by cryptography, a way of scrambling info so solely somebody with the proper non-public key can entry funds.
Each crypto transaction is recorded on a blockchain, which is a shared ledger maintained by 1000’s of computer systems slightly than a single authority. Customers retailer their crypto in digital wallets and commerce it on exchanges very similar to shares: they purchase cash utilizing actual cash, and after they wish to money out, they promote these cash and withdraw the equal quantity in rupees or {dollars}.
In idea, this technique is decentralized—the blockchain is distributed throughout many nodes, and nobody entity can train management. However in apply, most individuals don’t work together straight with the blockchain; they undergo centralized crypto exchanges, akin to CoinDCX.
These exchanges maintain buyer belongings in their very own wallets to allow them to course of trades and withdrawals shortly. Which means, as a substitute of every consumer securing their very own funds with cryptographic keys, the trade turns into the custodian of large pooled crypto reserves.
This centralization creates a single level of failure: if hackers entry an trade’s inside pockets or programs, they will transfer thousands and thousands inside minutes, bypassing the decentralization that exists on the blockchain stage.
This vulnerability retains exhibiting up in main breaches. In 2024, WazirX, one in all India’s greatest exchanges, suffered a catastrophic hack when attackers drained about $235 million value of funds nearly immediately.
Globally, different giant incidents have hit exchanges and cross-chain bridges, with tons of of thousands and thousands stolen every time.
Pressure on stability
Along with these headwinds, the crypto sector additionally hasn’t seen any vital funding inflows since 2022.
In response to three former executives, CoinDCX has additionally confronted runway points. Mint earlier reported that the corporate had held acquisition talks with world crypto trade Coinbase, which invested an undisclosed quantity within the firm in October.
Founder Gupta insists the runway will not be a priority. “The prevailing market situation is beneficial and our prime line continues to develop with a really wholesome margin. We’re Ebita optimistic and thus don’t dip into our reserves to run our enterprise… the optimistic Ebita provides us an infinite runway and the flexibility to speculate extra into rising merchandise and initiatives,” he asserted.
Ebita is brief for earnings earlier than curiosity, taxes and amortization.
In 2024-25, CoinDCX generated income of ₹571 crore and a revenue of ₹17 crore. Whereas income jumped 45% throughout the 12 months, it’s nonetheless decrease than what the trade totalled in 2021-22— ₹589 crore.
But the market response mirrored uncertainty. “After the latest CoinDCX incident, we noticed the traditional cycle: take a look at withdrawals, diminished balances, multi-venue hedging after which a partial return as soon as providers stabilized,” stated Raj Kapoor, founding father of the India Blockchain Alliance, an business physique.
Confidence, Kapoor stated, hasn’t disappeared, however it has turn out to be conditional. “On this atmosphere, governance is rising as a tough differentiator. Management stability, particularly in security-critical roles, is now handled as a part of an trade’s threat floor,” he stated. “Senior exits, no matter context, inevitably increase diligence questions.”
On the identical time, Kapoor famous, sturdy monetary buffers, seen board oversight and decisive communication will help restore reputational injury, and exterior curiosity from Coinbase retains strategic choices open.
Parallel bets disappoint
A number of parallel initiatives have failed to realize vital traction, the most important being Okto.
Okto is a self-custody crypto pockets and app launched by CoinDCX. It permits customers to retailer their digital belongings securely with out counting on an trade, whereas additionally offering entry to a number of blockchains, Web3 apps and token administration in a single platform. Web3 is the thought of a user-owned web the place knowledge is managed by people by means of decentralized applied sciences akin to blockchain as a substitute of centralized corporations.
Whereas the product streamlines the consumer expertise, it stays complicated and requires a level of data that limits mass adoption.
CoinDCX’s operations have come underneath pressure resulting from a number of parallel initiatives that failed to realize vital traction, with one of many largest being Okto.
“CoinDCX final raised funding in 2022, simply because the bull market was closing. The corporate had vital capital and experimented with completely different initiatives. The burn was excessive, and development wasn’t nice,” stated one former govt. “The product is visionary however forward of its time; adoption in India was all the time going to be low.”
“These have been major bets that worldwide gamers have tried, and as a pacesetter within the house, CoinDCX ventured into it as properly,” added one other former govt. “From a enterprise perspective, they didn’t carry out as anticipated, which created inside pressure.”
To handle this, the corporate built-in Okto into the principle CoinDCX platform slightly than operating it as a standalone product. “From a numbers standpoint, it labored, however the {dollars} spent didn’t make sense individually. The expectation was that it might explode like CoinDCX, however that speculation proved incorrect,” the manager stated.
Regardless of early challenges, Gupta famous that within the first half of 2025, Okto turned the primary self-custodial pockets to onboard over 500,000 verified customers absolutely on-chain, processing over $2 billion in transactions. Buying and selling volumes grew 38x year-on-year, led by futures and swaps, with Japan and South Korea contributing 72% of complete exercise.
“Like several new expertise, early adoption introduced studying curves round timing and consumer training. These experiences have made the product stronger,” stated Gupta.
Different initiatives, akin to EARN, which permits customers to earn curiosity on their crypto, and worldwide growth by means of the acquisition of BitOasis, have additionally not scaled as anticipated, in keeping with firm and business sources.
Every of the initiatives, stated Gupta, has superior with a transparent deal with compliance, sustainability and depth of influence slightly than fast scale.
Regulatory hurdles
India at the moment regulates cryptocurrencies as digital digital belongings (VDAs) by means of tax and anti-money-laundering frameworks slightly than a devoted crypto regulation.
The federal government imposes a 30% tax on VDA earnings and deducts 1% tax at supply on sure transactions, whereas additionally requiring exchanges to register with the monetary intelligence unit (FIU-IND) and observe strict know your buyer/anti-money-laundering guidelines.
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These laws increase compliance and reporting obligations for corporations akin to CoinDCX, growing operational prices and complexity, and making buying and selling costly for customers.
The crypto market, furthermore, is extremely unstable, with costs usually swinging sharply resulting from world occasions, regulatory bulletins and even social sentiment. Regulatory ambiguity in lots of international locations provides one other layer of unpredictability, as new guidelines can immediately shift market confidence.
“The 30% tax on positive aspects, the 1% TDS on transactions, and the absence of loss offsets have subdued high-frequency buying and selling and pushed customers towards longer holding intervals,” stated Harshal Dasani, enterprise head, INVasset PMS, a portfolio administration providers firm.
“FIU-IND has intensified enforcement, penalizing non-compliant offshore exchanges and compelling world gamers to register regionally. Consequently, most home volumes now movement by means of FIU-registered, absolutely KYC-compliant platforms,” Dasani added. However, he famous, whereas regulatory readability has improved, taxation stays the most important bottleneck to deeper liquidity.
Edu Patel, chief govt of crypto trade Mudrex, stated that whereas the latest US authorities shutdown had created uncertainty and triggered outflows, at a broader stage, there’s ahead motion by way of laws throughout the globe. “Strikes just like the Readability Act (states which cryptos are handled like shares and which like commodities) and the Genius Act (makes certain stablecoins/a digital greenback are absolutely backed and protected to make use of) have been a giant increase to the market, exhibiting the dedication of the Donald Trump administration in direction of crypto laws,” he stated.
The way in which ahead
An business govt famous that hiring seasoned prime administration is uniquely difficult within the crypto sector, and the latest spate of senior exits places CoinDCX in a tough place at a time when skilled management is crucial.
This expertise pressure is particularly vital as a result of CoinDCX is pursuing a deep vertical technique. Whereas CoinSwitch, its closest competitor, has diversified into equities by means of Lemonn, its investing platform, to hedge in opposition to regulatory uncertainty, CoinDCX has stayed firmly crypto-native. The corporate’s ecosystem bets, together with Okto and BitOasis, reinforce its dedication to scaling Web3 vertically.
To strengthen its aggressive footing, CoinDCX is now rolling out choices, a product a former govt stated is crucial for the corporate to remain aggressive. Choices are contracts that allow you to purchase or promote an asset at a set worth by a sure date, or resolve in opposition to doing so. CoinDCX says its choices are at the moment in a managed beta part because it validates threat programs and product economics.
But competitors is intensifying. Delta Trade, a rival, has gained early traction by launching India-focused crypto choices buying and selling and Indian rupee-settled futures, in keeping with a former govt. Not like conventional crypto buying and selling, these futures settle earnings and losses in rupees slightly than cryptocurrency, and the trade doesn’t maintain customers’ crypto on its platform. This method reduces the chance of hacks and appeals to cautious traders, giving it an edge, the manager added.
CoinDCX is at a crossroads. It was as soon as meant to be the business’s normal bearer: well-funded, regulator-friendly and technically unshakable. However the large hack and management churn don’t bode properly for its future.
The approaching months will decide whether or not confidence in CoinDCX stabilizes or whether or not rivals are in a position to benefit from its troubles.
