According to a series of tweets, CoinDCX has disclosed new plans to hand over the custodian role to customers. The decision implies that users will have comprehensive access and control over their virtual asset holdings. Hence, they will make transactions with limited restrictions from the company.
Relaying the new development on X, Sumit Gupta, the exchange's co-founder, wrote: “This gives all our CoinDCX users unprecedented control over their assets. Users now have the option to move their crypto holdings from CoinDCX’s custody to a decentralized wallet on the blockchain and also transfer it back to CoinDCX custody as needed.”
1/ Happy to share that @CoinDCX has rolled out a global, first-of-its-kind decentralized custody feature!
— Sumit Gupta (CoinDCX) (@smtgpt) October 30, 2024
This gives all our CoinDCX users unprecedented control over their assets. Users now have an option to move their crypto holdings from CoinDCX’s custody to a decentralized… pic.twitter.com/55LqaNs8KR
Factors Driving the Switch in Custodian Role
Explaining the exchange's decision, Gupta highlighted the enhanced security advancements stemming from adopting decentralized custody. “With decentralized custody, users gain full ownership of their assets with enhanced transparency and security while enjoying all of CoinDCX’s features. This is a game-changer for crypto asset management, setting a new benchmark for secure, user-controlled custody,” the co-founder added.
Meanwhile, aside from merely opting for a more secure framework for its users, the security breach incident involving WazirX was one of the main driving factors. Per reports, WazirX lost over 45% of the digital assets in their custody. The hijacked assets equated to over $230 million, which left 16 million users depressed and in sorrowful states. Surprisingly, the crime happened via a multi-sig wallet, initially deemed impermeable to online attacks.
CoinDCX New Custody System Features
The new blockchain wallet has unique features, distinguishing it from the native wallet. Instead of employing complex seed phrases, users are required to protect their funds using the multi-party structure and the two-factor authentication pin. The multi-party structure allows authorization only from the custodian and the Web3 company.
In his exact wording, Gupta stated: “Traditional self-custody wallets can be tricky, with seed phrases and private keys to manage. With our Web3 Mode, we eliminate these headaches, replacing them with two-factor authentication (2FA) and multi-party computation (MPC) for a more secure, accessible experience.”
