CoinDCX, India’s first digital currency unicorn, has expressed interest in taking over the ailing WazirX exchange, while CoinSwitch exchange has initiated a $70 million asset recovery program to help WazirX users who lost money due to the cyberattack of July 2024.

WazirX, once India’s largest digital asset exchange by trade volume, suffered a $235 million cyberattack last year and has been struggling to recover ever since. North Korea’s Lazarus Group carried out the WazirX hack. This underscores increasing worries about the security weaknesses of global digital currency platforms.

The takeover offer, as well as the extension of financial help to WazirX users, come at a time when India’s digital asset exchanges are likely looking at consolidation, with smaller exchanges either shutting down operations or merging with larger ones due to the country’s punishing taxation regime.

“We are closely following the developments and keep thinking of various options including taking over WazirX and working towards funds recovery. However, the matter is currently sub judice, limiting our ability to take direct action until there is a clear decision from the Singapore courts,” Sumit Gupta, co-founder of CoinDCX, said in an X post.

“That said, should the WazirX team approach us, and subject to court/creditor approvals, we are willing to step in and help. We are even prepared to deploy some capital from our own funds to assist affected users and help them recover their losses as much as possible,” Gupta added.

In July 2024, CoinDCX, India’s first digital currency unicorn, listed the BSV token for trading on its platform, allowing users to have more ways to buy, sell, and trade BSV. With CoinDCX’s close to 15 million registered users, the listing marks a significant expansion into the Indian market for BSV and demonstrates its potential and possibility in the region.

“We’re launching ‘CoinSwitch Cares,’ a Rs 600 crore (about $70 million) recovery program to help WazirX users who lost money due to the alleged cyberattack of July 2024,” Ashish Singhal, co-founder of CoinSwitch, said in a X post.

“CoinSwitch Cares is more than a recovery program—it’s our commitment to building a secure and thriving crypto ecosystem in India…affected users can recover losses, earn rewards, and re-enter the market with confidence through this community-focused initiative. Users can visit the CoinSwitch Cares portal (link in comments) to estimate recovery, deposit funds and claim rewards,” Singhal explained.

CoinSwitch is a product of PeepalCo, a wealth-tech products company. PeepalCo Group serves 19 million Indians and is backed by blue-chip investors, including Andreessen Horowitz (a16z) (NASDAQ: ZADIHX), Tiger Global, Ribbit Capital (NASDAQ: ZCFFJX), Paradigm, and Coinbase Ventures (NASDAQ: COIN).

On January 15, Singhal said that users have already claimed losses worth Rs 1,000,000 ($11,575) as rewards for signing up through the CoinSwitch Cares program.

“We want more users to take advantage of this program and recover their losses sooner. Since users get more rewards based on overall trading volumes under the program, more users on this program means faster recovery,” Singhal added.

India, the world’s biggest democracy, imposes a 30% flat tax on all digital currency income with no provision to offset losses and a 1% tax deducted at source (TDS) on all transactions above Rs 10,000 ($115). This may likely lead to a loss of about $1.2 trillion in trade volume on domestic exchanges over the years, a study from Esya Centre, an Indian policy think tank, claimed.

Some global exchanges shut down in India

While domestic exchanges have been increasingly complying with new regulatory demands, a few of the global digital asset exchanges have been shutting down operations in the world’s most populous nation.

Seychelles-headquartered OKX shut down its India operations in 2024, citing regulatory hurdles.

Digital asset exchange Bybit is the latest to “temporarily” halt its services to users in the fastest-growing major economy as regulatory pressures mount.

“Due to recent developments from Indian regulators and in continuation of previously implemented restrictions, we regret to inform you that, effective Jan. 12, 2025, 8AM UTC, Indian users will temporarily be unable to open new trades or access any products on the Bybit platform. The only exception will be withdrawals, which will remain available for your convenience,” Bybit said in a statement.

Bybit said it will continue to work with the Indian regulator to finalize its registration as a Virtual Digital Asset Service Provider in India. 

“We are committed to resuming full service as soon as we have completed our registration process with the FIU,” Bybit said.

The Financial Intelligence Unit-India, or FIU-India, the country’s anti-money laundering agency, began its crackdown in December 2023 by issuing “compliance show cause” notices to nine offshore cryptocurrency exchanges. The list included Binance, Bittrex, Bitfinex, and KuCoin, who were accused of operating in India without a proper license. The government’s actions escalated with a demand for Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOGL) to remove the apps of these exchanges from their respective app stores.

However, the FIU re-admitted Binance and KuCoin after they registered with the agency as reporting entities. Binance paid $2 million in penalty for noncompliance, while KuCoin rejoined after settling a $41,000 fine. Despite this, Binance faces other legal challenges, including a potential $86 million fine from a different regulatory body.

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