CoinSwitch, one of India’s largest cryptocurrency exchanges, has launched a ₹600 crore recovery fund to compensate users affected by last year’s WazirX hack. The initiative, according to co-founder Ashish Singhal, is part of an effort to rebuild trust in the Indian crypto ecosystem, which was severely shaken following the breach.
“The idea is to rebuild trust in the crypto ecosystem, which kind of went sideways after the WazirX incident,” Singhal explained. “I think it’s a good initiative; at least from our perspective, users are liking it. We will see how it evolves… It is not the first incident globally and maybe not the last one as well.”
Singhal emphasised the importance of robust cybersecurity measures and regulatory frameworks to prevent such events in the future. CoinSwitch works with globally recognised, SOC Type 2-certified custody providers to ensure the highest level of security. However, Singhal pointed out that security is a constantly evolving challenge and requires continuous effort.
“There are two things that need to happen in India. First is on the platform itself — security must be taken with utmost seriousness. Second is regulations. How can regulations allow such incidents to first reduce and then, in case it happens, what are the laws or what are the chances that users have to recover their funds?”
A Commitment to India
While many cryptocurrency exchanges operate with jurisdictions outside India, Singhal underscored that CoinSwitch has been registered in India from the beginning. “Our parent entity is in Singapore because we have multiple business lines. But our CoinSwitch entity, which is under Bitcipher Labs, is registered in India, and all jurisdiction lies in India,” he said.
Singhal explained that this local registration ensures users won’t need to deal with foreign laws in case of issues. “If the worst case happens, they don’t have to run to Singapore or any other country. CoinSwitch has been in India, will remain in India, and hopefully, with the right regulations, continue to flourish in India.”
Wishlist for India’s Budget
Singhal expressed concerns over India’s current crypto taxation framework. He highlighted two key issues: the inability to offset losses and the 1% TDS on all sell transactions, which he believes are discouraging users and stifling industry growth.
“Today, if you buy two cryptos, one where you make ₹10,000 profit, or one where you have ₹10,000 loss, you still have to pay 30% tax. So, you are in net loss, even after making equal profit, which is hurting user sentiment,” he said.
He proposed reducing TDS to 0.01% and aligning the taxation framework with securities markets to encourage more participation and ensure fairness.
The Fascination with Meme Coins
India’s love for meme coins was another topic of discussion. “They are crazy by the nature of it,” Singhal remarked. He explained that the trend fascinates people and often serves as an entry point into the crypto world. However, he acknowledged the risks associated with speculative tokens and highlighted CoinSwitch’s cautious approach in listing such assets.
Spot Bitcoin ETFs See Massive Inflows
Singhal also commented on the growing popularity of spot Bitcoin ETFs, noting that they have attracted over $50 billion in investments within a year — a milestone that took gold ETFs a decade to achieve. “Probably in a year or so, it would cross the gold ETF itself. So that tells you the scale,” he added.
The recovery fund and CoinSwitch’s focus on security, transparency, and regulation underline its commitment to fostering trust and growth in India’s crypto sector, a crucial step in rebuilding confidence among investors.
