Nikolas Sargeant
Coinbase appears to be pursuing a strategic acquisition of Indian cryptocurrency exchange CoinDCX through advanced negotiations that could value the platform at under $900 million, according to reports from Indian media outlet Livemint. The potential deal represents a significant markdown from CoinDCX's peak valuation of $2.2 billion achieved in 2021.
Two sources familiar with the discussions indicate Coinbase views this acquisition as a long-term strategic investment designed to establish a stronger foothold in India's developing cryptocurrency market. The timing comes just weeks after CoinDCX experienced a devastating $44 million security breach that has impacted market confidence.
Coinbase already maintains regulatory compliance in India through its Financial Intelligence Unit registration and holds existing stakes in both CoinDCX and CoinSwitch. One source characterized the potential acquisition as "essentially a low-cost gamble—positioning itself for potential upside if India's crypto market eventually matures."
However, CoinDCX CEO Sumit Gupta quickly moved to dispel acquisition speculation through social media statements. "CoinDCX is 'super focused' on building for India's crypto story and not up for sale," Gupta confirmed on X, calling the Coinbase acquisition reports "rumours" while promising additional clarification.
Strategic Market Re-Entry Following Regulatory Challenges
Coinbase initially entered the Indian market in April 2022 but faced immediate regulatory pressure that forced the suspension of UPI payments and trading services. The company officially ceased operations for Indian users on September 25, 2023, though it maintained strategic interest in the region.
The March 2024 FIU registration marked a pivotal moment, officially authorizing Coinbase to resume cryptocurrency trading services in India. This regulatory approval has cleared the path for renewed market participation in one of the world's largest potential crypto markets.
A Coinbase spokesperson declined to comment specifically on acquisition rumors but emphasized the company's global expansion strategy. "We have a bold mission to increase economic freedom globally, and continuously explore opportunities around the world to build, buy, partner, and invest to accelerate our roadmap," the spokesperson told Livemint.
Reports suggest Coinbase may consider consolidating its existing stakes in both CoinDCX and CoinSwitch, though CoinSwitch co-founder Ashish Singhal stated, "We don't have active conversations in this regard at this time."
Security Breach Complicates Acquisition Timeline
CoinDCX's recent security challenges add complexity to any potential acquisition discussions. The July 19 cyber attack resulted in $44 million in stolen cryptocurrency from an internal liquidity account, though the exchange assured users that customer funds remained secure.
Cybersecurity experts linked the incident to North Korea's Lazarus Group, citing similar attack patterns to the previous year's WazirX breach that resulted in $234 million losses. The connection to state-sponsored hacking groups raises additional security and regulatory considerations for potential acquirers.
CoinDCX has responded with a comprehensive recovery bounty program offering up to 25% of recovered funds to parties who successfully trace and retrieve stolen cryptocurrency. The bounty program could potentially distribute up to $11 million, demonstrating the exchange's commitment to fund recovery and security improvement initiatives.
