CoinDCX has launched a new program called the “Crypto Investors Protection Fund” (CIPF) to boost investor trust and add an extra layer of security. The goal of this fund is to safeguard users’ money in case of security breaches or other unplanned events that could put customer funds at risk.
Sumit Gupta, co-founder of CoinDCX, announced the start of the CIPF and talked about how it will make user investments safer. Gupta said, “This dedicated fund will add another layer of protection, making sure that our customers’ assets stay safe and sound.”
CoinDCX’s New Fund
At first, 50 crores, or about $6 million, will be used to pay the CIPF. CoinDCX is going to add to this fund by putting aside 2% of its trading income over time. The fund will be closely watched and reviewed every year to make sure it stays useful and effective.
The CIPF was created after a major security breach at WazirX, which caused the loss of over $230 million, or about 45% of its customer assets. Because of the hack, WazirX couldn’t keep a 1:1 guarantee ratio.
In response to the breach, WazirX created a “socialized loss strategy” that let users get to 55% of their assets right away while the rest was locked in Tether’s USDT. But people in the crypto community didn’t like the method. They thought it was unfair and an attempt to avoid taking full responsibility. After that, the exchange gave up on the idea.
The CIPF is part of a growing trend among cryptocurrency platforms to set up emergency funds to protect users from the growing number of cyberattacks. For example, Binance set up the Secure Asset Fund for Users in 2018 with money from some trade fees. In the same way, HTX set up a 20,000 BTC backup fund in 2019, and OKX has set up its Risk Shield fund with money from its earnings.
As long as there are security problems in the cryptocurrency market, adding safety steps like the CIPF should give users more peace of mind and financial safety.
