An employee of the CoinDCX cryptocurrency exchange has been arrested by Bengaluru police in India following a major security incident in July. The incident involved a significant sum of digital assets being illicitly transferred from the platform.
Rahul Agarwal, a software engineer at CoinDCX, is suspected of having his credentials compromised. Investigators believe this security lapse allowed unauthorized parties to infiltrate the system, resulting in the movement of approximately $44 million in cryptocurrency.
According to a report published by The Times of India on July 31, the arrest was made after Neblio Technologies, the parent company of CoinDCX, conducted an extensive internal review of the breach.
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The investigation revealed that Agarwal’s company-issued laptop was utilized to gain unauthorized access to critical internal systems. While questioned about the incident, Agarwal has denied any direct involvement in the theft.
However, he acknowledged engaging in freelance work for several external clients during his tenure at CoinDCX. His laptop has been confiscated by authorities as a key piece of evidence in the ongoing inquiry.
Hardeep Singh, Vice President at Neblio, verified that Agarwal was a full-time employee and had been assigned a company laptop strictly for work-related activities. Law enforcement officials noted that the hackers may have induced him to install malicious programs, thereby creating an entry point into the CoinDCX system without directly stealing his login details.
CoinDCX CEO Sumit Gupta conveyed via a statement on X (formerly Twitter) that the company is refraining from commenting publicly during the active investigation. He suggested that the incident appears to be a sophisticated instance of social engineering, where employees are often the primary focus of malicious actors.
Separately, on July 16th, the BigONE exchange reported a security breach, with losses of approximately $27 million from a hot wallet. To find out more about this event, read the complete report.
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