In a surprising twist of events in the Indian cryptocurrency scene, CoinDCX, a prominent digital asset exchange, has come out swinging against allegations that it moved user funds to non-compliant entities in Lithuania. The accusations, reportedly leveled by rival exchange WazirX, have thrown a spotlight on CoinDCX’s operations just as the crypto world braces for the Singapore High Court proceedings set for July 15, 2025.
CoinDCX Hits Back
Sumit Gupta, Co-founder and CEO of CoinDCX, was quick to address what he described as “misinformation” in a statement to CoinDesk. Gupta underscored the integrity of CoinDCX’s operations, emphasizing that all user funds—both in INR and cryptocurrency—have been securely held by Neblio Technologies, the exchange’s Financial Intelligence Unit-registered entity in India. “For the record,” Gupta clarified, “CoinDCX did not have any entity in Lithuania until February 2025.”
The allegations come amidst ongoing scrutiny of WazirX, which has been under a harsh spotlight since last year’s massive $230 million hack. According to an affidavit filed as part of the Singapore High Court proceedings, WazirX claimed that CoinDCX had held user funds in a Lithuania-based entity not registered with India’s Financial Intelligence Unit until earlier this year. This echoes recent concerns in the industry, such as the Crypto Exchange GMX Drained of Bitcoin, Ethereum in $40 Million Exploit, highlighting the vulnerabilities exchanges face.
Regulatory Compliance and Trust
Gupta’s response was not just a blanket denial. He provided a timeline of CoinDCX’s compliance measures, highlighting that the company updated its Terms of Use on February 7, 2025, to make Neblio Technologies the formal contracting party. This change, he explained, was part of a proactive strategy designed to bolster transparency and user trust. “We did this proactively so that CoinDCX users never face challenges like those seen during the WazirX episode,” Gupta stated.
Industry experts are taking notice of CoinDCX’s approach. Rahul Sood, a blockchain analyst, points out that CoinDCX’s swift rebuttal and detailed explanation could set a precedent for transparency in the industry. “In a market fraught with skepticism, CoinDCX’s response might just be the blueprint other exchanges need,” Sood suggests.
The Wider Implications
This tug-of-war between two of India’s crypto giants raises broader questions about regulatory practices within the burgeoning digital currency industry in India. With the crypto market’s volatility and the increasing scrutiny from regulatory bodies, the pressure to maintain transparency and compliance has never been higher. CoinDCX’s case illustrates the tightrope that exchanges must walk between innovation and regulation. For a deeper dive into the regulatory implications, see our coverage of the U.S. Secret Service’s role in crypto regulation.
The timing of these allegations is noteworthy. As the Singapore High Court gears up for its hearing, the entire industry is watching closely. The outcome could have significant ramifications, influencing how exchanges operate globally and how they manage user funds.
The crypto community remains divided, however. While some traders express confidence in CoinDCX’s commitment to compliance, others remain cautious, reflecting the broader tension in the market regarding regulatory oversight.
Looking Ahead
As we stand on the cusp of the Singapore High Court proceedings, the unfolding saga between CoinDCX and WazirX remains a focal point for the crypto community. The case underscores the importance of regulatory frameworks and compliance in maintaining user trust—a currency as valuable as the digital assets themselves.
What does the future hold for CoinDCX? If Gupta’s stance is anything to go by, the exchange is poised to continue its trajectory, focusing on user safety and compliance. Yet, the question lingers: will other exchanges follow suit in setting higher standards of transparency, or will the crypto market continue to grapple with the shadows of uncertainty? The coming weeks may offer some answers, but for now, the industry waits with bated breath.
Source
This article is based on: Indian Crypto Exchange CoinDCX Denies Moving User Funds After WazirX Allegations
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
