THE TURMOIL ROILING INDIA'S CRYPTO PIONEER

CoinDCX is contending with regulatory uncertainty, attrition, a $44 million breach and failed bets

- Samiksha Goel

(TARUN KUMAR SAHU/MINT)

When CoinDCX launched in 2018, India's crypto scene was barely more than a whisper in the larger tech conversation. Bitcoin had made a big splash a year earlier with its dramatic surge, and a handful of early adopters were tinkering with wallets that few understood.

Exchanges were scarce, liquidity was poor, and the language of blockchain still drew blank stares from bankers and regulators alike. Investors dismissed it as a fad and founders operated in the shadows, unsure whether what they were building would even be legal a month later.

A Reserve Bank of India's (RBI) circular in 2018 banning banks from working with crypto companies arrived just as the sector was beginning to find its feet, forcing entrepreneurs to improvise overnight.

Amid that haze, two Indian Institute of Technology (IIT) Bombay graduates, Sumit Gupta and Neeraj Khandelwal, started CoinDCX in a Mumbai apartment, believing that India, one of the world's fastest-digitizing economies, would eventually need its own gateway to the world of digital assets.

It was an audacious bet made at a time when there was no playbook, no clear path to compliance, and no indication that crypto could ever go mainstream in India.

Gupta and Khandelwal first met in Kota, the coaching hub, where they were preparing for engineering entrance exams, eventually making it into IIT Bombay. They started CoinDCX, a cryptocurrency trading exchange, seven years ago to make crypto accessible to Indians. The company earns money mostly from trading fees, which are a small percentage of each trade.

Soon after the launch, however, the RBI imposed a banking ban on crypto transactions, limiting bank partnerships and fiat (money issued by government) access. In March 2020, the Supreme Court struck down the RBI ban, opening the market up again. CoinDCX's user base began growing; by February 2022 it had over 10 million users.