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India's largest crypto exchange absorbs $16 million loss from internal process failure tied to retired wallet

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India's largest crypto exchange absorbs $16 million loss from internal process failure tied to retired wallet

CoinDCX, India’s largest crypto exchange by trading volumes, says it has absorbed a $16 million loss after an internal process failed to move customer deposits out of a retired wallet.

It all started last week, when blockchain sleuths flagged about $16 million in suspicious outflows from wallets linked to the Mumbai-based exchange. CoinDCX was quick to dismiss the reports, with CEO Sumit Gupta calling it a false alarm on X.

A spokesperson told CoinDesk that the addresses cited by the sleuths were old ones, created in January 2025 and compromised in the July 2025 hack, which cost the exchange about $44 million, and that CoinDCX had not used them since. In essence, the exchange said the activity did not have any connection with CoinDCX.

But ZachXBT, a well-known on-chain investigator, said at least one of those addresses, labeled TQKJQ, was in use by a liquidity provider and swept user deposits to CoinDCX’s current public hot wallet as recently as April and May 2026.

On Sunday, CoinDCX published a blog post on the activity tied to TQKJQ, saying the wallet belongs to its old operational wallet infrastructure and that the loss was tied to it.

“This wallet belongs to our old operational wallet infrastructure, which was compromised during the security incident we reported on July 19, 2025, and was deprecated as a result,” CoinDCX said.

The post explained that some users mistakenly continued to deposit funds into the deprecated, or retired, addresses even after the exchange deprecated them following the 2025 hack.


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