CoinDCX, one of India’s leading cryptocurrency exchanges, has reported a substantial security incident resulting in a $15.99 million loss in USDT after unauthorized activity was detected on October 21. The breach was linked to old wallet addresses that had been inactive following a security issue in July 2025, according to statements from the company.
Funds Lost Through Outdated Wallets
The company identified unusual on-chain activity in its infrastructure, leading to an immediate investigation. CoinDCX reported that the affected wallets were already deactivated after an earlier breach. However, a temporary malfunction in its automated balance consolidation prevented some deposited funds from being transferred promptly to new, secure wallets. As a result, these dormant wallets remained vulnerable, exposing the platform to losses when individuals continued sending assets to outdated addresses.
CoinDCX confirmed that the entire amount lost would be reimbursed by the company, assuring users that current wallets and trading operations have not been compromised. The exchange emphasized that user funds remain safe and that withdrawals and other platform operations are unaffected by the breach.
CoinDCX stated that the company would “compensate for the entire $15.99 million loss,” highlighting that all trading and withdrawal services continue without disruption, and current wallets are secure.
The firm explained that a short-term technical error in its automatic funds consolidation process left some deposits stranded in old wallet addresses, which ultimately resulted in the loss. CoinDCX pointed out that the affected system had not been in use for months, yet customers still occasionally sent digital assets to these obsolete addresses.
This incident demonstrates the importance of updating and monitoring inactive wallets to prevent risks associated with outdated crypto infrastructure.
Mini dictionary: CoinDCX is a major Indian cryptocurrency exchange offering trading and investment services in digital assets to millions of users.
Firm Recovers Partial Funds Through Blacklisting
Blockchain analytics firm AMLBot reported that $2.2 million from the stolen funds was successfully frozen after Tether, the issuer behind USDT, blacklisted the wallets associated with the hack. Tether’s ability to restrict transactions from compromised wallets played a key role in limiting further circulation of the stolen USDT.
| Metric | Value |
|---|---|
| Total USDT lost | $15.99 million |
| USDT frozen | $2.2 million |
| Percentage recovered | 13.8% |
Freezing the funds has prevented them from being moved or traded on exchanges. However, CoinDCX clarified that the frozen assets will only be considered recovered once their return is verified. The exchange continues efforts to trace the remaining assets and work with external partners to secure additional recoveries.
The blacklisting led to $2.2 million being frozen, which represents about 13.8% of the lost amount, though CoinDCX noted that not all of these funds have yet been returned.
Security Implications for the Crypto Sector
The breach highlights vulnerabilities that can emerge when old wallet addresses are not properly retired or monitored. Industry experts stress that exchanges must vigilantly track obsolete wallets and proactively notify users to prevent accidental deposits to addresses no longer under secure management.
The role of stablecoin issuers like Tether in combating illicit activities is underscored by their ability to freeze suspicious funds, yet this step does not guarantee full recovery for affected platforms.
CoinDCX reaffirmed its position that all losses will be covered by the company, and the firm will continue to keep users informed about any additional developments regarding the hack or recovery of funds.
