• Crypto & Funx
• 03 Nov, 2024

By assigning users a blockchain wallet outside the exchange’s infrastructure, CoinDCX minimizes hacking risks.

This innovative solution eliminates the need for seed phrases and complex keys, instead uses two-factor authentication.

CoinDCX’s new feature aligns fully with Indian regulations, ensuring that users can explore DeFi safely while adhering to local laws.

In a major development, the Indian crypto exchange CoinDCX introduced the world’s first decentralized crypto custody solution learning from the latest incident of the WazirX hack. As a result, its users will get complete and direct control over their crypto assets.

Thus, per the announcement, 15 million CoinDCX users will be able to retain control over their digital asset holdings without having to move their funds off the platform. Usually, crypto exchanges store users’ crypto funds across hot and cold wallets that are usually vulnerable to attacks.

With this new feature in place, CoinDCX users will get a blockchain wallet assigned that stores funds outside the exchange’s infrastructure. Thus, it significantly reduces the exposure to crypto hacking risks. Furthermore, users will also be able to transfer their assets back to the exchange at any point of time.

This new feature sets itself apart from traditional custodial wallets by removing the need for seed phrases and complex private key management. Instead, it uses standard security measures like two-factor authentication and multi-party computation, functioning similarly to a “dual-key bank locker, requiring both user and platform authorization to access assets”, explains CoinDCX co-founder Sumit Gupta. He also added:

“This multi-layered security reduces the risk of unauthorized access, ensuring maximum protection for users”.

“This multi-layered security reduces the risk of unauthorized access, ensuring maximum protection for users”.

CoinDCX Complies with Indian Regulations

In a commitment to security and regulatory adherence, CoinDCX has confirmed that its latest feature aligns entirely with Indian laws. The update not only expands user access to the decentralized finance (DeFi) ecosystem but does so with a focus on safety and legal compliance.

“Security and compliance go hand in hand,” CoinDCX stated. It also assured that they can confidently explore DeFi options while knowing that the asset remains fully secure and entirely compliant with Indian regulations.

CoinDCX’s push for self-custody comes as the Indian crypto exchanges continue to navigate following the massive $245 million hack of WazirX earlier this year impacting a total of 16 million users.

Following the attack, demand for self-custody options has surged, highlighting the vulnerabilities inherent in centralized custody models.

“CoinDCX is committed to bringing innovative, user-friendly solutions to the crypto and Web3 community. With this decentralized custody feature, we are raising the bar for asset management security in India,” Sumit Gupta explained.