Coinbase in talks to acquire India's CoinDCX after $44M breach
What's the story
Coinbase, a leading cryptocurrency exchange, is reportedly in advanced talks to acquire CoinDCX, one of India's largest crypto platforms. The deal could further strengthen Coinbase's presence in the Indian market. According to Livemint, CoinDCX could be valued at under $1 billion in the acquisition deal. This would be a significant drop from its peak valuation of $2.2 billion in 2022.
Acquisition strategy
Coinbase's acquisition spree this year
If the deal with CoinDCX goes through, it would mark another major acquisition by Coinbase this year. The company had previously acquired Deribit for $2.9 billion and three other crypto start-ups—Liquifi, Spindl, and Iron Fish—to strengthen its trading and infrastructure capabilities. Coinbase CEO Brian Armstrong has said that the company is always open to mergers and acquisitions (M&A) if they are right for their business model.
Market re-entry
Coinbase's re-entry into Indian market
In March, Coinbase received a license from India's Financial Intelligence Unit (FIU) to operate in the country. The move was part of its plan to re-enter the Indian market after a failed attempt in 2022 due to regulatory issues. The ongoing talks with CoinDCX could further bolster this strategy by giving Coinbase access to an established player in India's crypto space.
Security breach
CoinDCX is recovering from $44 million hack
The acquisition talks come as CoinDCX is still recovering from a $44 million hack that targeted its internal liquidity wallet earlier this month. Despite the breach, CEO Sumit Gupta assured that no customer funds were affected as they are stored in cold wallets. He also said that losses would be covered by the company's treasury and that enhanced security measures are being put in place to prevent future incidents.