CoinDCX Confirms $16M Loss After Failed Wallet Sweeping System Exposed Deposits

• CoinDCX confirmed a $15.99 million loss linked to a failed wallet-sweeping system.
• Deposits sent to previously compromised wallets remained exposed after the system failed.
• Customer balances and active trading systems remain unaffected.

CoinDCX, a prominent crypto exchange that has recently come under scrutiny after reporting unusual activity, finally confirmed a $15.99 million loss. Although the company initially dismissed speculations of a possible security breach, it has now admitted that the loss occurred due to a failed automated system.

CoinDCX’s Failed Wallet Sweeping System Exposed Deposits

The latest reports claim that CoinDCX has lost about $15.99 in USDT due to a failed wallet sweeping system. The system was supposed to move customer deposits from old wallets to safer ones, but it failed to do so in the recent incident.

As the company claims, these wallets were compromised during the exchange’s July 2025 hack. As the automated system failed to transfer the new deposits, the funds remained in the affected wallets. Thus, they were exposed to further risks.

What was CoinDCX’s Initial Response?

Initially, the Indian crypto exchange dismissed reports of suspicious wallet activity. CEO Sumit Gupta described the claims as a “false alarm.” The exchange stated that the wallets involved had been retired after the previous security incident.

As CoinEdition reported, Gupta stated that the compromised wallets might have been used by the hackers of the 2025 incident. He added that the latest movement has no direct connection with the crypto exchange.

Loss Confirmed; Customer Funds Remain Safe

Now, CoinDCX has confirmed that about $15.99 million in USDT have been lost due to the vulnerability. But the team assured that customer balances remain unaffected. It also clarified that the active wallets and trading system continue to function as usual.

Further, the company acknowledged that its initial response to the suspicious activity in its system could have been more proactive. But still, the firm hasn’t revealed when exactly the automated sweeping stopped working or how the funds were taken from the compromised wallets.

What Caused the $16M Loss?

Notably, the loss was linked to a failure in the exchange’s automated wallet-sweeping system. The service was designed to move customer deposits from old wallets to active ones. But some customers continued to send funds to those outdated addresses even after the 2025 hack. The exchange had a recovery mechanism that credited such deposits to customer accounts. A separate automated service transferred the funds to active wallets.

But things changed when the sweeping service stopped working. As a result, newly deposited funds remained in the old wallets instead of moving to the active infrastructure. As the addresses had been previously compromised, the deposits remained exposed to potential theft.

However, the exchange hasn’t disclosed how long the service remained inactive or exactly how the funds were taken.  It is also unclear if the attackers behind the 2025 hack are responsible for the current movement.

Fresh Concerns Arise

Significantly, the latest incident has raised questions about CoinDCX’s security measures and how it manages old wallet addresses. Investors remain concerned even if the exchange assures that the funds remain safe. The loss shows how a failure in one automated system can expose millions of dollars in deposits.

The incident also highlights the need to monitor retired wallets and ensure that recovery systems continue to work normally. It is also concerning that the exchange hasn’t shared full details about the vulnerability. CoinDCX has also not explained the additional safeguards it plans to introduce.

Related: CoinDCX Denies New Security Breach After $16M USDT Transfer Alert