CoinDCX absorbs $16M USDT loss as Tether freezes $2.2M

Indian exchange CoinDCX says it has absorbed a loss of about 15.99 million USDT after an automated process that swept customer deposits out of old, previously hacked wallet addresses failed, while Tether has frozen 2,212,850 USDT in nine TRON addresses linked to the outflow, TokenPost reports. The update follows our first report on the $16 million of flagged transfers earlier this week.

What CoinDCX says now

• The money left TRON addresses that CoinDCX created in January 2025 and says were compromised in its July 2025 hack.
• Some users kept depositing to those deprecated addresses despite warnings. CoinDCX relied on a regular sweep to move such deposits to safety, and says that process failed for a period it has not specified.
• In a statement dated 25 October, the exchange said it covered the 15.99 million USDT loss itself, that affected user deposits were credited, and that active wallets, trading, deposits and withdrawals were unaffected.

Co-founder Sumit Gupta had initially said no security vulnerability was involved. On-chain investigators disputed the "old wallets" framing: blockchain data firm Bitquery says nearly all of the money, about $15.8 million, came from one address where deposits had built up since March, and that the exchange's systems were still routing deposits through the same wallets on the day of the theft.

How the freeze worked

Tether, which issues USDT, can blacklist individual addresses so the tokens there can no longer move. TRON records show it froze nine addresses in one batch at 22:45 UTC on 22 October, roughly 31 hours after the main transfer, according to Bitquery. By then, about $9.6 million had already reached accounts at OKX, Binance and Gate, Bitquery says, so the frozen 2.21 million USDT is only about 14% of the total.

Why it matters

The episode shows two sides of holding USDT. Issuer freezes can claw back stolen funds, but only if they come before the money is swapped or deposited elsewhere. And address hygiene matters on both ends: exchanges that retire wallets need to keep sweeping them, and users should always copy a fresh deposit address from the app rather than reuse an old one. Our guide on how to store USDT safely covers networks, addresses and freezes in more detail.