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CoinDCX says it lost 15.99 million USDT after deposits sent to deprecated wallet addresses accumulated when an automated sweeping service stopped working. The exchange says it has absorbed the loss and that customer balances, active wallets, trading, deposits and withdrawals were unaffected. The admission came three days after co-founder and CEO Sumit Gupta described on-chain reports as a “false alarm.” CoinDCX has not identified who moved the funds or explained precisely how the retired infrastructure was accessed.
Did CoinDCX lose $16 million?
Yes. CoinDCX’s 25 October 2026 account puts the loss at 15.99 million USDT, a figure commonly rounded to $16 million because USDT is designed to track the US dollar. The company said: “This led to a loss of 15.99 million USDT which was absorbed by the company.”
The loss was associated with old operational wallet infrastructure rather than the exchange’s currently active wallet system, according to CoinDCX. The company says the incident did not reduce customer portfolio balances and that customer assets remain segregated in cold wallets protected by offline controls.
How did the retired wallets cause the loss?
CoinDCX says some customers continued sending deposits to addresses created under an older wallet setup. The exchange credited those deposits to user portfolios immediately, then depended on a secondary automated service to sweep the actual tokens from the deposit address into a primary wallet.
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The failed sweeping process
That sweeping service failed for a period. Deposits therefore remained in a deprecated address identified in the company’s update as TQKJQ, rather than being moved into the primary wallet. CoinDCX says the old infrastructure had unknown vulnerabilities and that the accumulated balance was later transferred out.
What the blockchain reports showed
FlashRescue co-founder Darcy publicly flagged approximately 15.99 million USDT and 5,783.81 TRX leaving addresses linked to CoinDCX. The Block reported that the largest single transfer was 15,819,002 USDT and that the funds were routed to deposit addresses at Binance, OKX and Gate. Those on-chain observations established the movement of funds, but not the identity of the person controlling the destination addresses.
Why did Sumit Gupta call it a “false alarm”?
On 22 October, after unusual activity was reported, Gupta wrote: “Thanks for highlighting but this is incorrect and CoinDCX wallets are not breached.” CoinDCX initially said the flagged addresses were old and that the claims were misleading. Gupta also suggested that hackers appeared to be reusing addresses associated with the July 2025 incident.
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ZachXBT challenged that explanation, saying one deposit address had remained in use by a liquidity provider for about 10 months after the July incident and had swept deposits to CoinDCX’s current hot wallet as recently as April and May 2026. CoinDCX published its fuller explanation on 25 October, acknowledging the 15.99 million USDT loss and the failed sweep.
What is the timeline of the CoinDCX wallet incident?
| Date | What happened |
|---|---|
| 19 July 2025 | CoinDCX reported that an internal operational account used for liquidity provisioning on a partner exchange was compromised in a server breach. It described exposure of about 44 million USDT, said customer assets were segregated in cold wallets and promised to absorb the loss. |
| 21 October 2026 | CoinDCX says it detected unusual activity in its systems. |
| 22 October 2026 | The company observed irregular blockchain fund movement and user reports, but initially called the claims misleading. Gupta described them as a “false alarm.” |
| 25 October 2026 | CoinDCX disclosed that deprecated infrastructure had unknown vulnerabilities, the sweeping service had failed and 15.99 million USDT had been lost. |
| 26 October 2026 | CoinDesk and The Block reported the admission and the remaining questions about access to the retired addresses. |
Were CoinDCX customer funds affected?
CoinDCX says customer funds were not affected in its accounting or access systems. The exchange states that active wallet infrastructure continued operating, user deposit balances remained fully accounted for, and trading, deposits and withdrawals were uninterrupted. It also says customer assets were held separately in cold wallets.
That statement describes CoinDCX’s reported customer-account position; it does not establish how the deprecated addresses were accessed or whether every control around residual infrastructure worked as intended. No reviewed disclosure says that the company recovered the transferred USDT.
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What remains unresolved?
- The identity of the attacker or controller of the destination addresses has not been disclosed.
- CoinDCX has not specified the exact access method used against the deprecated infrastructure.
- It remains unclear whether the event was a new compromise, continued access from the July 2025 breach, or another form of unauthorized control.
- The company has not publicly confirmed recovery of the 15.99 million USDT.
Accordingly, it is too early to label the event a separate new hack or to claim that the funds are recoverable.
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Is CoinDCX safe after the wallet incident?
CoinDCX’s own account indicates that customers could continue using active services and that customer assets were segregated in cold storage. The incident nevertheless exposes operational risks that matter for any exchange: retired addresses can remain in circulation, automated sweeps can fail silently, and old infrastructure may retain access longer than expected.
Controls users should expect from an exchange
- Clear separation between customer custody wallets and operational or liquidity accounts.
- Automatic detection and escalation when deposit-sweeping jobs stop.
- Immediate retirement, monitoring and revocation procedures for old addresses and credentials.
- Fast, complete public updates when blockchain evidence conflicts with an initial statement.
- A documented process for deposits sent to addresses that the exchange no longer intends to support.
CoinDCX’s disclosure addresses some of these issues, but it does not yet provide a complete post-incident technical report.
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What should you check before sending crypto to an exchange?
- Open the exchange’s current deposit screen rather than relying on a saved address, chat message or old transaction record.
- Confirm the asset and network exactly; a correct address on the wrong network can still result in an unrecoverable transfer.
- Compare the first and last characters of the displayed address before approving the transaction.
- For a substantial amount, send a small test transaction and wait for the exchange’s credit confirmation.
- Keep the transaction hash and screenshots of the deposit page until the balance is credited.
- If an exchange says an address is retired, stop using it and contact support before sending anything else.
CoinDCX’s user guidance is explicit: “Always verify the latest deposit address in the CoinDCX app or website before every deposit.”
Frequently Asked Questions
Was the CoinDCX incident the same as the July 2025 breach?
The company links the affected addresses to infrastructure compromised during the July 2025 incident, but it has not established whether the 2026 movement was continued access, a fresh attack or another mechanism. The two events should therefore not be treated as conclusively identical.
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A sweep is an automated transfer that moves funds from an individual deposit address into an exchange-controlled primary wallet. If the job stops, tokens can remain stranded in the deposit address even while the exchange credits the user’s internal balance.
Can a crypto exchange reverse a transfer sent to an old address?
Usually only if the exchange still controls the address and can move the asset on that network. If an address has been compromised or its keys are unavailable, recovery may be impossible, so users should contact the exchange before attempting another transfer.
Why are customer balances separate from an exchange’s operational loss?
An exchange can maintain an internal ledger crediting customers while holding the corresponding tokens in separate custody wallets. A loss from an operational wallet may then be absorbed by the company, provided it can honor those ledger balances and withdrawals.
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