Exchanges were scarce, liquidity was poor, and the language of blockchain still drew blank stares from bankers and regulators alike. Investors dismissed it as a fad and founders operated in the shadows, unsure whether what they were building would even be legal a month later.
A Reserve Bank of India’s (RBI) circular in 2018 banning banks from working with crypto companies arrived just as the sector was beginning to find its feet, forcing entrepreneurs to improvise overnight.
Amid that haze, two Indian Institute of Technology (IIT) Bombay graduates, Sumit Gupta and Neeraj Khandelwal, started CoinDCX in a Mumbai apartment, believing that India, one of the world’s fastest-digitizing economies, would eventually need its own gateway to the world of digital assets.
It was an audacious bet made at a time when there was no playbook, no clear path to compliance, and no indication that crypto could ever go mainstream in India.
The golden era
Gupta and Khandelwal first met in Kota, the coaching hub, where they were preparing for engineering entrance exams, eventually making it into IIT Bombay. They started CoinDCX, a cryptocurrency trading exchange, seven years ago to make crypto accessible to Indians. The company earns money mostly from trading fees, which are a small percentage of each trade.
Soon after the launch, however, the RBI imposed a banking ban on crypto transactions, limiting bank partnerships and fiat (money issued by government) access. In March 2020, the Supreme Court struck down the RBI ban, opening the market up again. CoinDCX’s user base began growing; by February 2022 it had over 10 million users.
The bull market of 2021-22 was a golden era for India’s crypto scene. CoinDCX and other exchanges rode a wave of retail interest and soaring digital-asset prices, which lifted their revenue to unprecedented levels.
Every new listing and every market rally seemed to fuel a frenzy of trading, drawing in millions of first-time investors. CoinDCX saw its revenue leap to ₹589 crore that year, from just ₹47 crore in 2020-21.
For a brief moment, the industry felt unstoppable, as if the crypto boom had opened a doorway to limitless growth. Riding that wave, CoinDCX raised $90 million in Series C funding in August 2021, hitting a valuation of $1.1 billion and becoming India’s first crypto unicorn.
The company stood out as a breakout success story in India’s cryptocurrency universe. But that would soon change.
Exit battles
After the highs came a challenging phase marked by regulatory probes and a cascade of exchange failures. In India, the Enforcement Directorate opened investigations into several exchanges, including CoinDCX and CoinSwitch, for possible violations of anti-money-laundering and foreign-exchange rules.
Globally, the collapse of major platforms such as FTX in 2022 illustrated how fragile the ecosystem had become. All of this dampened sentiment in India, killing investor interest.
Amid all this, the company has suffered a series of setbacks. In 2023, CoinDCX undertook a restructuring drive to cut costs, laying off about 100 employees.
This year, it has seen multiple senior hands leave. Former chief technology officer Vivek Gupta left in June; vice president and head of legal Tushar Tarun exited in July; chief human resources officer Mudita Chauhan quit in October, and senior vice president and head of information security Sridhar G. in September. The company has maintained that attrition is a natural part of business cycles.
But according to conversations with current and former employees and industry watchers, many other executives in top or middle management are eyeing the exit doors, raising questions about the company’s internal stability and direction.
The theft
Human resources problems aside, a big theft four months ago threatened CoinDCX’s financial footing and its hard-earned credibility in an already fragile market.
On 19 July, attackers gained unauthorized access to the company’s back-end systems and drained about $44 million from an internal liquidity wallet. The breach did not impact customer accounts, which the exchange said remained secured. According to investigators, the attackers hacked the system using compromised credentials of a company engineer whose work laptop had been infected with malware.
CoinDCX confirmed the incident on 20 July and said it had isolated the affected wallet and launched a recovery programme, including a 25% bounty for information that could help retrieve the stolen funds.
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A cryptocurrency is digital money secured by cryptography, a method of scrambling information so only someone with the correct private key can access funds.
Every crypto transaction is recorded on a blockchain, which is a shared ledger maintained by thousands of computers rather than a single authority. Users store their crypto in digital wallets and trade it on exchanges much like stocks: they buy coins using real money, and when they want to cash out, they sell those coins and withdraw the equivalent amount in rupees or dollars.
In theory, this system is decentralized—the blockchain is distributed across many nodes, and no one entity can exercise control. But in practice, most people don’t interact directly with the blockchain; they go through centralized crypto exchanges, such as CoinDCX.
These exchanges hold customer assets in their own wallets so they can process trades and withdrawals quickly. That means, instead of each user securing their own funds with cryptographic keys, the exchange becomes the custodian of massive pooled crypto reserves.
This centralization creates a single point of failure: if hackers access an exchange’s internal wallet or systems, they can move millions within minutes, bypassing the decentralization that exists at the blockchain level.
This vulnerability keeps showing up in major breaches. In 2024, WazirX, one of India’s biggest exchanges, suffered a catastrophic hack when attackers drained about $235 million worth of funds almost instantly.
Globally, other large incidents have hit exchanges and cross-chain bridges, with hundreds of millions stolen each time.
Strain on stability
In addition to these headwinds, the crypto sector also hasn’t seen any significant funding inflows since 2022.
According to three former executives, CoinDCX has also faced runway issues. Mint earlier reported that the company had held acquisition talks with global crypto exchange Coinbase, which invested an undisclosed amount in the company in October.
Founder Gupta insists the runway is not a concern. “The existing market condition is favourable and our top line continues to grow with a very healthy margin. We are Ebita positive and thus do not dip into our reserves to run our business… the positive Ebita gives us an infinite runway and the ability to invest more into growing products and initiatives,” he asserted.
Ebita is short for earnings before interest, taxes and amortization.
In 2024-25, CoinDCX generated revenue of ₹571 crore and a profit of ₹17 crore. While revenue jumped 45% during the year, it is still lower than what the exchange totalled in 2021-22— ₹589 crore.
Yet the market reaction reflected uncertainty. “After the recent CoinDCX incident, we saw the classic cycle: test withdrawals, reduced balances, multi-venue hedging and then a partial return once services stabilized,” said Raj Kapoor, founder of the India Blockchain Alliance, an industry body.
Confidence, Kapoor said, hasn’t disappeared, but it has become conditional. “In this environment, governance is emerging as a hard differentiator. Leadership stability, especially in security-critical roles, is now treated as part of an exchange’s risk surface,” he said. “Senior exits, regardless of context, inevitably raise diligence questions.”
At the same time, Kapoor noted, strong financial buffers, visible board oversight and decisive communication can help repair reputational damage, and external interest from Coinbase keeps strategic options open.
Parallel bets disappoint
According to several current and former senior executives, most of whom didn’t want to be identified, CoinDCX’s operations have come under strain due to multiple parallel initiatives that failed to gain significant traction, with one of the largest being Okto.
Okto is a self-custody crypto wallet and app launched by CoinDCX. It allows users to store their digital assets securely without relying on an exchange, while also providing access to multiple blockchains, Web3 apps and token management in a single platform. Web3 is the idea of a user-owned internet where data is controlled by individuals through decentralized technologies such as blockchain instead of centralized companies.
While the product streamlines the user experience, it remains complex and requires a degree of knowledge that limits mass adoption.
CoinDCX’s operations have come under strain due to multiple parallel initiatives that failed to gain significant traction, with one of the largest being Okto.
“CoinDCX last raised funding in 2022, just as the bull market was closing. The company had significant capital and experimented with different initiatives. The burn was high, and growth wasn’t great,” said one former executive. “The product is visionary but ahead of its time; adoption in India was always going to be low.”
“These were primary bets that international players have tried, and as a leader in the space, CoinDCX ventured into it as well,” added another former executive. “From a business perspective, they didn’t perform as expected, which created internal strain.”
To manage this, the company integrated Okto into the main CoinDCX platform rather than running it as a standalone product. “From a numbers standpoint, it worked, but the dollars spent didn’t make sense individually. The expectation was that it would explode like CoinDCX, but that hypothesis proved incorrect,” the executive said.
Despite early challenges, Gupta noted that in the first half of 2025, Okto became the first self-custodial wallet to onboard over 500,000 verified users fully on-chain, processing over $2 billion in transactions. Trading volumes grew 38x year-on-year, led by futures and swaps, with Japan and South Korea contributing 72% of total activity.
“Like any new technology, early adoption brought learning curves around timing and user education. These experiences have made the product stronger,” said Gupta.
Other initiatives, such as EARN, which allows users to earn interest on their crypto, and international expansion through the acquisition of BitOasis, have also not scaled as expected, according to company and industry sources.
Each of the initiatives, said Gupta, has advanced with a clear focus on compliance, sustainability and depth of impact rather than rapid scale.
Regulatory hurdles
India currently regulates cryptocurrencies as virtual digital assets (VDAs) through tax and anti-money-laundering frameworks rather than a dedicated crypto law.
The government imposes a 30% tax on VDA profits and deducts 1% tax at source on certain transactions, while also requiring exchanges to register with the financial intelligence unit (FIU-IND) and follow strict know your customer/anti-money-laundering rules.
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These regulations raise compliance and reporting obligations for companies such as CoinDCX, increasing operational costs and complexity, and making trading expensive for users.
The crypto market, moreover, is highly volatile, with prices often swinging sharply due to global events, regulatory announcements or even social sentiment. Regulatory ambiguity in many countries adds another layer of unpredictability, as new rules can instantly shift market confidence.
“The 30% tax on gains, the 1% TDS on transactions, and the absence of loss offsets have subdued high-frequency trading and pushed users toward longer holding periods,” said Harshal Dasani, business head, INVasset PMS, a portfolio management services company.
“FIU-IND has intensified enforcement, penalizing non-compliant offshore exchanges and compelling global players to register locally. As a result, most domestic volumes now flow through FIU-registered, fully KYC-compliant platforms,” Dasani added. But, he noted, while regulatory clarity has improved, taxation remains the biggest bottleneck to deeper liquidity.
Edu Patel, chief executive of crypto exchange Mudrex, said that while the recent US government shutdown had created uncertainty and triggered outflows, at a broader level, there’s forward movement in terms of regulations across the globe. “Moves like the Clarity Act (states which cryptos are treated like stocks and which like commodities) and the Genius Act (makes sure stablecoins/a digital dollar are fully backed and safe to use) have been a big boost to the market, showing the commitment of the Donald Trump administration towards crypto regulations,” he said.
The way forward
An industry executive noted that hiring seasoned top management is uniquely challenging in the crypto sector, and the recent spate of senior exits puts CoinDCX in a difficult position at a time when experienced leadership is critical.
This talent strain is especially significant because CoinDCX is pursuing a deep vertical strategy. While CoinSwitch, its closest competitor, has diversified into equities through Lemonn, its investing platform, to hedge against regulatory uncertainty, CoinDCX has stayed firmly crypto-native. The company’s ecosystem bets, including Okto and BitOasis, reinforce its commitment to scaling Web3 vertically.
To strengthen its competitive footing, CoinDCX is now rolling out options, a product a former executive said is essential for the company to stay competitive. Options are contracts that let you buy or sell an asset at a set price by a certain date, or decide against doing so. CoinDCX says its options are currently in a controlled beta phase as it validates risk systems and product economics.
Yet competition is intensifying. Delta Exchange, a rival, has gained early traction by launching India-focused crypto options trading and Indian rupee-settled futures, according to a former executive. Unlike traditional crypto trading, these futures settle profits and losses in rupees rather than cryptocurrency, and the exchange doesn’t hold users’ crypto on its platform. This approach reduces the risk of hacks and appeals to cautious investors, giving it an edge, the executive added.
CoinDCX is at a crossroads. It was once meant to be the industry’s standard bearer: well-funded, regulator-friendly and technically unshakable. But the giant hack, leadership churn and shrinking business do not bode well for its future.
The coming months will determine whether confidence in CoinDCX stabilizes or whether competitors are able to take advantage of its troubles.
