Indian crypto exchange CoinDCX has reported a loss of approximately $15.99 million USDT after funds were moved from an old wallet infrastructure it no longer actively used. The exchange said it has absorbed the full loss and customers will not bear the cost.
CoinDCX said its active wallets, trading systems, and customer funds held in cold storage were not affected. Trading, deposits, and withdrawals continued without interruption.
How the Incident Occurred
The exchange first detected unusual activity in its systems on October 21, 2026. Investigation revealed that funds had been withdrawn from a legacy wallet setup that had been compromised during a security incident on July 19, 2025. CoinDCX stopped using that infrastructure after the 2025 breach.
Despite the wallet being retired, some users continued sending deposits to old addresses rather than updated ones. CoinDCX processed these deposits to prevent user loss, crediting accounts immediately upon receipt. However, a separate service responsible for moving, or "sweeping," these funds into secure storage failed during a period of time. This caused deposits to accumulate in the old address, where they became exposed during the recent activity.
CoinDCX has not disclosed full details about how the funds were withdrawn or identified who was responsible.
Tether Freeze and Recovery Efforts
Tether, the issuer of USDT, blacklisted wallets linked to the outflow. Blockchain analytics firm AMLBot reported that approximately $2.2 million was frozen, representing roughly 13.8 percent of the reported loss.
A freeze prevents funds from moving but does not constitute recovery. CoinDCX would need to confirm any actual return of assets, and the remaining funds still require tracing.
Response and Future Measures
CoinDCX acknowledged it "could have been more proactive" in communicating the incident. The company said it delayed its public announcement until it had gathered complete information.
The exchange plans to strengthen monitoring and controls around legacy systems and will regularly remind users that old deposit addresses remain active only for limited periods. CoinDCX advised users to verify the current deposit address in the app or website before each deposit, warning that sending funds to outdated addresses carries significant risk and that exchanges typically do not assume responsibility for such transfers.
