Indian crypto exchange CoinDCX on Monday pledged Rs. 100 crore to upgrade its cyber safety infrastructure. Exchange co-founder Sumit Gupta took to X to launch the Digital Suraksha Network (DSN) looking to create a shared cyber security infrastructure between regulators.
The development comes after Gupta and his CoinDCX co-founder Neeraj Khandelwal were taken into police custody earlier last week as part of a scam investigation. Now on bail, the co-founders have initiated this cyber upgrade initiative as they navigate the ongoing probe.
DSN goals
Under the DSN, the CoinDCX leaders plan to offer an AI-backed WhatsApp helpline for financial market participants to seek for help over identified suspicious activities.
The creation of an open fraud intelligence API and an elaborate cyber safety infrastructure is also on the cards.
The broader objective of the DSN is to propogate the sentiment of “Caution before Transaction” among the Indian investor community. The efforts are intended to empower retail and institutional investors alike in the safety of the digital finance ecosystem.
“Before you send money to an unknown platform, before you click on a link promising guaranteed returns, before you share your KYC details with someone you met on Telegram – message us. We will verify it for you in real time,” the annoncement by Gupta explained.
The system will be designed to work not just for crypto investors, but for the broader digital market overall.
Gupta expects that the shaping up of the DSN could take upto a few years.
Case that inspired DSN
Earlier this month, an FIR was filed against Gupta and Khandelwal at Thane-based Mumbra police station. CounDCX founding partner Mridul Gupta was also named in the FIR.
The complaint, filed by an insurance consultant, alleged that he lost Rs. 71 lakh in an apparent scam by an entity that resembled the CoinDCX platform.
The investor was promied monthy returns of 10 percent to 12 percent on this investor, which he believed was a gurantee by CoinDCX.
The CoinDCX leaders were questioned by the Mumbra police during which the crypto entrepreneurs claimed that the website that the plaintiff had been engaging with was actually impersonating CoinDCX.
A company spokesperson shared the bail order with Coin Headlines that shows that the company founders have agreed to appear in the court as and when required for further questionings.
Source: CoinDCX spokesperson
Gupta called the experience “deeply unsettling”.
Numbers don’t lie
Scams targeting the financial sector, particulary crypto have only risen in numbers over the last few years on a global level. U.S.’ FBI and India’s CBI are among international law enforcement agencies that have repeatedly raised alerts to warn investors against blind engagements with financial services.
In his DSN announcement, Gupta claimed that in the last 21 months, CoinDCX has documented over 1,200 fraudulent websites impersonating the platform.
He noted that every internet user in India is a potential victim if timely measures are not initiated.
Source: X/ @smtgpt
Indian law enforcement agencies have been busting crypto crimes regularly.
Just last month, the CBI reportedly arrested Ayush Varshney, the co-founder of Darwin Labs, who is responsible for a massive crypto scam ring involving a whopping Rs. 20,000 crore.