CoinDCX launches decentralized custody after WazirX breach.

According to a statement on October 30, 15 million CoinDCX customers can control their cryptocurrency holdings without transferring money off the site. User money is usually kept in exchange-controlled hot and cold wallets, which are often subject to intrusions. Users of CoinDCX will be given a blockchain wallet with the new functionality, which lowers exposure to such dangers by storing money outside of the exchange's infrastructure.

Additionally, users may return their assets to the exchange whenever they choose. The new functionality also eliminates the need for complicated private key maintenance and seed phrases, which sets it apart from standard custodial wallets. According to CoinDCX co-founder Sumit Gupta, it instead uses widely accepted security protocols like multi-party computation and two-factor authentication, which function as a "dual-key bank locker, where both user and platform authorization are needed to access assets."

"This multi-layered security ensures maximum protection for users by lowering the risk of unauthorized access," Gupta said. As the Indian cryptocurrency industry struggles to recover from the $235 million WazirX theft, which prevented almost 16 million users from accessing their cryptocurrency and cash holdings, CoinDCX is urging self-custody.

WazirX suspended all services after the attacker stole 45% of customer cash from one of its multi-signature wallets. Since the assault exposed the flaws in centralized custody models, there has been a sharp increase in requests for self-custody alternatives.CoinDCX set up the "Crypto Investors Protection Fund" one month after the WazirX hack in preparation for the possibility of a repeat attack on the platform. The exchange will contribute 2% of its brokerage profits to the fund over time, in addition to an initial investment of around $6 million.