CoinDCX Software Engineer Arrested Over $44M Crypto Exchange Hack

An employee of CoinDCX, a cryptocurrency exchange hacked for $44 million in mid-July, was arrested in India in connection with the security breach, according to multiple local reports. Bengaluru City police detained CoinDCX software engineer Rahul Agarwal after hackers allegedly compromised his login credentials to siphon the exchange’s assets, as reported by The Times of India. The arrest followed a complaint and internal investigation by CoinDCX operator Neblio Technologies, which found that Agarwal’s credentials had been compromised via his work laptop, allowing unauthorized access to the company’s servers. During questioning, as his laptop was seized, Agarwal, 30, denied involvement in the crypto theft but admitted to taking on part-time work for up to four private clients while still employed at CoinDCX.

“Sophisticated social engineering attack”

CoinDCX declined to confirm or deny Agarwal’s arrest, referring to an X post by CoinDCX co-founder and CEO Sumit Gupta. Gupta stated the exchange cannot engage with media amid an ongoing investigation.

“Based on our internal preliminary findings, this appears to be a sophisticated social engineering attack,” Gupta said, adding that employees are often targeted in such attacks.

A CoinDCX spokesperson urged the media and public to avoid speculation or circulation of unverified information, as it may impede the ongoing investigation.

Agarwal’s professional background

According to Neblio’s vice president for public policy, Hardeep Singh, Bengaluru police said the arrested employee was a permanent staff member issued a laptop strictly for his role at CoinDCX. Agarwal came under investigation after Neblio discovered that an unknown individual hacked the system during the night of July 19 and transferred 1 USDt stablecoin to a wallet. Later that morning, hackers siphoned $44 million and transferred the funds to six wallets. Based on a LinkedIn profile purported to be Agarwal’s, the arrested employee had been with CoinDCX for over two years, building his career in the DevOps domain. He began as a senior software engineer in May 2023, working remotely from Bengaluru, Karnataka. After two years, he was promoted to staff engineer in April 2025, a position he currently holds on-site. According to The Indian Express, police officers said hackers tricked Agarwal into installing malware on his office laptop. The news came days after CoinDCX CEO Sumit Gupta reported the exchange was hacked on July 19. Gupta stated no user funds were affected by the exploit, explaining that hackers compromised one of CoinDCX’s internal accounts used for liquidity provisions with another exchange through a server breach.

Source: Cointelegraph

Frequently Asked Questions (FAQ)

Regarding the CoinDCX Hack and Arrest:

Q: What was the total amount stolen in the CoinDCX hack? A: Approximately $44 million in cryptocurrency was siphoned from the exchange. Q: What was the method used to compromise CoinDCX's systems? A: The breach is believed to have occurred through a sophisticated social engineering attack that compromised an employee's login credentials, potentially via malware on their work laptop. Q: Was the arrested software engineer found guilty? A: The arrested software engineer, Rahul Agarwal, denied involvement in the theft and stated he was performing part-time work for other clients. The investigation is ongoing. Q: Were user funds affected by the hack? A: CoinDCX CEO Sumit Gupta stated that no user funds were affected by the exploit. The compromised accounts were internal ones used for liquidity provision. Q: How did the hackers gain access to the system? A: Hackers allegedly tricked the software engineer into installing malware on his office laptop, which then allowed them to access company servers.

Crypto Market AI's Take

This incident highlights the persistent cybersecurity challenges within the cryptocurrency exchange sector. Even with sophisticated systems, human error and social engineering tactics remain significant vulnerabilities. At Crypto Market AI, we prioritize robust security protocols and continuous monitoring to safeguard our platform and user assets. Our commitment to advanced AI-driven security measures aims to preempt such threats and ensure a secure trading environment. We offer secure digital asset storage solutions through our secure wallet features and employ state-of-the-art security protocols across our entire infrastructure, as detailed in our security section.

CoinDCX employee arrested in connection with 4M crypto hack: Report