WazirX Hack Spurs Regulatory Scrutiny and User Migration While CoinDCX Sees Growth Amid India’s Crypto Market Uncertainty
India’s cryptocurrency market has faced significant turbulence following the major WazirX exchange hack in July 2024, where roughly $235 million was stolen, reportedly by North Korea’s Lazarus Group. This incident resulted in the loss of approximately Rs. 2,000 crore in user funds, locking out over 4.4 million users. In response, WazirX proposed a restructuring plan to recover 85% of user assets by May 2025, with the rest to be paid out in subsequent years, contingent on business recovery. However, despite over 93% user approval, implementation remains pending court approval in Singapore. A related petition to India’s Supreme Court seeking further investigation was dismissed due to the absence of clear cryptocurrency regulations, underlining the urgent need for oversight.
After the hack, investor confidence in Indian crypto exchanges waned, causing many to migrate to platforms with stronger compliance such as CoinDCX, which reported a 12% jump in user base—most new users under age 35. CoinDCX’s trading volume surged to $995 million in late 2024, before dropping to $388 million by March 2025 amid global volatility and regulatory uncertainty. Despite more than 16 million Indians actively trading crypto and India being top-ranked globally for grassroots crypto adoption, concerns remain as the Supreme Court likened Bitcoin trading to ‘Hawala’, criticizing the government’s delay in crafting regulation. International regulatory developments in the US and EU are also shaping Indian market sentiment and trading dynamics. CoinDCX CEO Sumit Gupta anticipates that greater regulatory clarity and institutional interest could further bolster India’s crypto sector.
For crypto traders, market sentiment remains cautious. While user growth and grassroots adoption are positive, continued regulatory ambiguity and high-profile security incidents are likely to contribute to increased volatility and risk premiums for Indian exchanges. Enforcement of stronger regulations and successful fund recovery by WazirX could improve trust, whereas prolonged uncertainty could depress trading activity and prices.
Bearish
The WazirX security breach and slow fund recovery have severely shaken investor confidence in Indian crypto exchanges, prompting a significant migration to platforms with stronger compliance such as CoinDCX. Despite user growth and high grassroots adoption rates, persistent regulatory uncertainty and the Supreme Court’s critical stance fuel negative sentiment. Trading volumes have been volatile, with sharp rises followed by steep declines. Until India establishes clear regulatory protocols and resolves high-profile hack incidents, market sentiment is expected to remain bearish, with ongoing risk aversion and potential pressure on prices for Indian crypto assets.