2025-12-27 15:23:34

Some time ago, a leading compliant platform's agent in India was arrested, causing quite a stir. Looking back, this incident stems from a security incident in May of this year—a hacker bribed a contractor to directly access and steal user data from inside, resulting in losses of up to $400 million. After months of intensive investigation, Indian law enforcement finally cracked the case and also announced that more arrests are forthcoming.

This incident actually highlights a very real issue with centralized exchanges: no matter how big or secure a platform is, there are always vulnerabilities where people are involved. Contractors and third-party service providers can access sensitive data, but their review and regulatory oversight are usually not as strict as that of direct employees. The platform handled it quite well, announcing full compensation, and the matter is still ongoing, which has somewhat salvaged its reputation.

The clearest takeaway for users is: don't put all your eggs in one basket. Consider dispersing large funds into hardware wallets, multi-signature solutions, and other schemes that do not rely on a single platform, so as to truly avoid the risks of centralized custody.

From a regional perspective, India's attitude towards the crypto industry has been fluctuating—sometimes imposing heavy taxes, other times cracking down on illegal activities. This arrest may help the crypto industry establish a more regulated image locally. But for the platform itself, the $400 million loss plus subsequent legal disputes make the situation quite challenging, and their expansion in emerging markets may need to be reconsidered.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

9 Likes

Reward
9
6
Repost
Share

Comment

0/400

GovernancePretender

· 7m ago

400 million USD, that's a huge loss. Contractor insiders are the most disgusting, and it's hard to guard against them.

View OriginalReply0

SocialAnxietyStaker

· 12-27 15:53

Centralized exchanges are crashing again, and this time people are even getting arrested. $400 million, just pay if you say so—does money really not matter? Hardware wallets have been ordered; managing your own private keys is the way to go. India's legal environment is truly outrageous—strict today, relaxed tomorrow. Seeing this kind of thing so often makes me even more determined to use cold wallets; I don't trust platforms anyway. Honestly, it's still a human problem—no matter how strict the scrutiny, internal leaks can't be prevented.

View OriginalReply0

LayerZeroHero

· 12-27 15:53

Contractors are really the hardest to defend against in reality, with a tuition fee of 400 million dollars. Multi-signature wallets are the right way, let's go with hardware cold wallets. India is indeed a powder keg, with compliance difficulty increasing exponentially. Only true decentralization can let you sleep peacefully; otherwise, no one can save you. No matter how big centralized platforms are, they can't prevent internal leaks. This incident proves everything with data.

View OriginalReply0

SatoshiLeftOnRead

· 12-27 15:46

400 million USD is gone just like that; the issue of internal leaks at CEX really can't be overlooked. The contractor chain is too loose; as soon as the money is handed over, they turn hostile, making it impossible to rely on. It's another story of "we will compensate in full," but user data has long been exposed. If I were in the Indian market, I would also need to recalculate. Hardware wallets are truly reliable; this is how it should have been done from the start. Internal leaks are unstoppable, everyone. This is the fate of centralization. 400 million dollars, even the largest CEX can't withstand such operations. Non-custodial is the real way; everything else is nonsense. No matter how compliant the platform is, internal personnel can still betray you. India isn't going to finish this matter quickly; there's still more to come.

View OriginalReply0

GasFeeNightmare

· 12-27 15:43

Another case of a "big platform also crashing," contractor insider tricks are really hard to guard against. But to be fair, full compensation indeed saved the situation; otherwise, the reputation would have been ruined. Self-custody is the way to go; this has been said over and over again... $400 million, brother. This amount of money is enough for them to eat dirt for a long time. Law enforcement in India suddenly became very active, probably also forced by circumstances. I told you not to all-in on a certain platform, now believe it. Contractors are much riskier than official employees; this legal loophole needs to be fixed. Hardware wallets are my peace of mind; anyway, they can't hack my private keys. This platform suffered such a huge loss, the plan for emerging markets must be cut. The ultimate problem with centralization is the variable "people"; no matter how secure, it's useless.

View OriginalReply0

DiamondHands

· 12-27 15:28

That's why I withdrew early. No matter how big the platform is, it can't withstand internal betrayal. Centralization is like this; no matter how many security teams there are, human nature can't be fully protected. The contractor link is really the weakest point in defense. It seems every incident involves this guy. Full compensation still requires legal action, how bad must the user experience be? I've always said that hardware wallets are the way to go. Managing your own assets is the only way to sleep peacefully. India's regulatory attitude is really inconsistent—strict one day, lenient the next. It's annoying for anyone. Four hundred million yuan. This emerging market really isn't as attractive as it used to be.

View OriginalReply0