Coinbase Secures Approval in India for $2.45 Billion Stake in CoinDCX

Coinbase has officially received the green light from India’s Competition Commission to acquire a minority stake in CoinDCX, valued at $2.45 billion. This marks a significant step in the U.S. exchange's efforts to expand into one of Asia’s rapidly growing cryptocurrency markets.

Key Takeaways

Coinbase has received regulatory approval to acquire a minority stake in CoinDCX valued at $2.45 billion.
The investment deepens Coinbase's partnership with India’s largest digital asset platform.
CoinDCX recently recovered from a major hack that stole $44 million.
Coinbase is expanding its presence in key markets while aiming for full regulatory compliance in India.
The investment supports new product launches and enhances security measures within CoinDCX.

Coinbase Wins India Approval for $2.45B CoinDCX Stake

After months of review, the approval further strengthens Coinbase’s partnership with CoinDCX, which is India's largest digital asset platform.

Paul Grewal, the Chief Legal Officer of Coinbase, referred to this approval as an “important regulatory milestone,” reaffirming the company's long-term commitment to CoinDCX, which boasts over 20.4 million users across India and the UAE and manages more than $1.2 billion in assets.

This latest investment builds on Coinbase’s initial support of CoinDCX in 2020, particularly important after CoinDCX experienced significant security challenges earlier this year.

Recovery from a $44 Million Security Breach

The approval follows a tumultuous period for CoinDCX, which faced a significant security breach seven months prior that led to the loss of $44 million from an internal liquidity account.

Cyvers, a cybersecurity firm, attributed this July incident to North Korea's Lazarus Group, drawing parallels with a similar breach involving WazirX exactly one year earlier. During the hack, the thieves executed the theft in just five minutes, conducting seven rapid transactions after performing test transactions days earlier.

Indian police arrested a CoinDCX software engineer whose compromised credentials allegedly enabled the breach. However, the engineer asserted that hackers exploited his system while he was freelancing with company equipment.

Despite the breach, CoinDCX CEO Sumit Gupta reassured customers that their funds were safe throughout the incident. The exchange also launched a recovery bounty program, offering up to 25% of retrieved assets, potentially worth around $11 million.

Coinbase addressed the breach in its investment statement, emphasizing that CoinDCX's handling of the situation “only strengthened our conviction in their team and platform.“

Strengthening Strategic Positioning in Key Markets

This strategic investment enhances Coinbase’s footprint in India and the Middle East, particularly after CoinDCX acquired Dubai-based BitOasis last year. Coinbase views both regions as “top areas for crypto growth” due to high adoption rates, supportive regulations, and robust economic prospects.

Gupta highlighted that this new funding would accelerate the launch of new products across the Web3 ecosystem, facilitating market expansion and improving security infrastructure. He described the investment as “more than just capital,” stating it reflects a “deep vote of confidence in our mission, approach, and team.“

As Coinbase returns to direct operations in India after a two-year gap, the company now offers crypto-to-crypto trading, with plans to incorporate rupee deposits by 2026. This return required compliance with full regulatory standards, following service suspensions in 2023 due to issues with payment processors.

John O’Loghlen, Coinbase’s director for Asia-Pacific, noted that closing existing customer accounts opposed typical business strategies but effectively established a clean regulatory slate.

Coinbase has also secured registration with the Financial Intelligence Unit alongside competitors like Binance, KuCoin, and Bybit, who encountered similar regulatory challenges before compliance.

Broader Strategic Expansion Beyond India

The CoinDCX deal enhances Coinbase’s position in a market where citizens hold approximately $4.5 billion in digital assets, despite facing challenging tax policies, including a 30% profit tax and a mandatory 1% transaction tax.

India ranks high in global crypto adoption indexes, even as the Reserve Bank remains skeptical about cryptocurrencies due to concerns over financial stability.

Currently, Coinbase employs over 500 people in India and is actively recruiting for both local and international roles. Grewal has also joined the board of the U.S.-India Business Council to promote commercial ties.

This investment aligns with Coinbase’s broader efforts to expand into new product categories and markets. Recently, the exchange launched prediction markets through a collaboration with Kalshi, introduced stock trading options, and announced integrations with Solana at its product showcase in San Francisco, where CEO Brian Armstrong stated, “Coinbase is now the best place to trade every asset, not just crypto.“

Additionally, Coinbase has filed with U.S. regulators for a National Trust Company Charter to provide payments and financial services independently of third-party banks. The company has also moved its corporate registration from Delaware to Texas to enhance regulatory efficiency and flexibility.