In October this year, India’s crypto and fintech industry was shaken up when Rahul Agarwal, a 25-year-old software engineer from Bengaluru, was arrested for his involvement in the ₹384 cr CoinDCX Hack, one of the top Cryptocurrency exchange in India. Both tech funds and the crypto community are already feeling the ramifications of the arrest, as supporters grow nervous about insider risks, foreign cybersecurity issues, and the reliability of decentralized finance (DeFi).
The following article explains the whole scenario, who masterminded it, at what moment was this breach and how does it effect Indian exchanges.
Table of Contents
What Is the ₹384 Cr CoinDCX Hack?
At CoinDCX: Odd Outflow of Funds- ₹383.8 Crores on 25th July 2025 Initially suspected to be a hack, deeper investigation discovered all the hallmarks that this was not an external breach — it was from within.
The police worked with cybersecurity firms, which she said investigated the leads and traced the activity to a former sales executive at CoinDCX Rahul Agarwal, 33, a software engineer from Bengaluru.
Who Is Rahul Agarwal?
Rahul Agarwal is unlike your everyday cyber-criminal.
With 10 years of experience in backend development and blockchain integration, he is an alumnus of a top Indian engineering college. He served as an external contractor for CoinDCX’s core infrastructure team in 2023 from 2021.
Initial reports suggest that although Rahul walked away from it all but the company enjoyed a parting of ways with him.
As investigators would later discover, Rahul had planted a backdoor in the internal crypto wallet APIs of the platform, which he graciously triggered in 2025 to syphon off money for several weeks.
Timeline of Events
| Date | Event |
| June 2025 | CoinDCX notices small inconsistencies in wallet balances |
| July 15, 2025 | Over ₹100 crore moved in a single transaction |
| July 20, 2025 | Internal audit points toward internal tampering |
| July 23, 2025 | Law enforcement involved |
| July 25, 2025 | ₹384 crore confirmed missing |
| August 1, 2025 | Rahul Agarwal arrested from his Koramangala residence |
How Did the Hack Work?
Cybersecurity professionals say that Rahul added malware in the smart contract backend using his earlier access to CoinDCX internal systems. The exploit lay dormant, time-locked to be executed at a far future date so no one would suspect anything.
It’s reported to be a very sophisticated routing job using privacy-focused blockchains and crypto tumblers, allowing him to launder these funds through many wallets, making trace impossible.
However, blockchain forensics firms such as Chainalysis and TRM Labs helped track and lock-in cryptocurrency values worth ₹160 crore globally.
CoinDCX’s Response
In a video statement, CoinDCX CEO Sumit Gupta revealed the breach this week “was a day of betrayal; seeing funds being siphoned out of our wallets was an opportunity for all exchanges in the industry to wake up.” The platform assured that:
- The cold wallets and the insured hot wallet not to be affected are safe, so do user funds.
- The losses were in-house and will be covered by company reserves.
- The new security model will be based on zero-trust architecture.
- The authorities are in talks with Interpol and Indian officials to get back the remaining funds.
It also paused some withdraw services cos of investigation.
What This Means for Indian Crypto Investors
This case has begged the question, is there a scare in the security of Indian crypto exchanges with SEBI and RBI pondering to have a closer look at them.
The hack is likely to complicate matters further by eroding investor confidence at a time when the industry was gearing up for mainstream legitimacy through the NSDL IPO and tax reforms.
Experts argue this is not a crypto problem but a security and governance issue, much like insider banking frauds.
Legal Proceedings Against Rahul Agarwal
Additionally, Rahul Agarwal have been booked under several sections of the Information Technology Act, IPC and PMLA (Prevention of Money Laundering Act).
Early reports indicate it asked worked alone and while those who may have encouraged or coordinated his act from abroad are being further examined.
If found guilty, Rahul can be given a sentence of up to 20 years and also has to pay a large sum in fines.
Industry-Wide Reactions
- All these exchanges — WazirX, ZebPay & Kuber released statements asserting that they have carried out their internal audits.
- Concerns are so high that tech founders want mandatory white-hat security audits.
- This round of X (formerly Twitter) has users calling for live proof-of-reserve systems on exchanges.
This scandal may not be so negative if it causes exchanges to take on more self-regulation and provide better security measures.
Has CoinDCX Lost Investor Trust?
Although the news has inevitably brought panic, CoinDCX’s immediate response and user fund security have given it a partial respite. According to CoinDCX News analytics:
- After the hack, user activity decreased by 12% in one week.
- Both App downloads and new signups were slightly down;
- Nevertheless, after this incident most of the long-term investors and crypto influencers remained with the platform.
Key Takeaways
- The ₹384 crore CoinDCX hack is India’s largest crypto insider theft to date.
- It was orchestrated by Rahul Agarwal, a former backend contractor.
- CoinDCX has confirmed no user losses and full system recovery is underway.
The case could set a precedent for cybercrime law and crypto regulation in India.
FAQs – CoinDCX Hack & Rahul Agarwal Case
Q1. Did the CoinDCX hack claim my money?
A: As per the Tweet by CoinDCX, all of its user funds are safe because what was stolen were some internal reserves.
Q2. Who is Rahul Agarwal?
A: A suspected mastermind of ₹384 crore hacking, a former backend engineer and outsourced through operator work at CoinDCX.
Q3. Is CoinDCX still safe to use?
A: Yes. The company has since bolstered its security and engaged third-party auditors.
Q4. So, how did Rahul Agarwal beat the system.
A) He managed to put in some dormant backdoor code in the organization when he was at positions of power and later activated it such that Monero is being siphoned.
Q5. Will CoinDCX compensate affected users?
Q: There was no loss of user funds, so compensation is unnecessary. Trading and Withdrawal Fully Operational.
Q6. How much of the money has been recovered?
A: This is the ₹160 crore that has been traced and frozen across various crypto exchanges.
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