CoinDCX is India’s first crypto unicorn
Founded in 2018, CoinDCX has onboarded more than 3.5 million users. In the coming months, CoinDCX will launch CoinDCX Prime initiative, its latest offering in the HNI & enterprise space
_1614586556676_1614586583624_1628568436858.jpg "Sumit Gupta, founder, CoinDCX")
PremiumNEW DELHI/BENGALURU : d Banerjee & Ayushman Baruahnew delhi/bengaluru
CoinDCX raised $90 million in a Series C funding round at a valuation of $1.1 billion, becoming the first Indian cryptocurrency exchange to achieve unicorn status amid regulatory uncertainty over crypto assets.
The funding was led by B Capital Group, founded by Facebook co-founder Eduardo Saverin. Existing investors such as Coinbase Ventures, Polychain Capital, Block.one, and Jump Capital also participated in the round.
The funds “will be used predominantly to further our ambition of ensuring that crypto awareness is spread over the length and breadth of India," CoinDCX said in a statement on Tuesday.
Sumit Gupta, co-founder and chief executive officer at CoinDCX, said the exchange plans to partner with fintech startups to expand the crypto investor base and set up a research and development facility.
Founded in 2018, CoinDCX has onboarded more than 3.5 million users. In the coming months, CoinDCX will be launching the CoinDCX Prime initiative—its latest offering in the high net worth individuals (HNI) and enterprise space. It also plans to launch Cosmex, CoinDCX’s global trading product.
“India is experiencing a dramatic growth in demand for cryptocurrencies and digital assets, yet only a few platforms provide the efficiency, security and compliance that investors have come to expect," Gupta said.
CoinDCX ranks among the top four crypto exchanges in India, the others being WazirX, CoinSwitch Kuber and Zebpay.
Crypto exchanges in India have not had it easy. For instance, the Enforcement Directorate (ED) issued a show-cause notice to India’s largest crypto exchange in terms of trading volume, WazirX, and its directors Nishchal Shetty and Sameer Hanuman Mhatre, on 10 June, accusing the platform of violating foreign exchange regulations in India with crypto transactions worth ₹2,790 crore.
The company has 7.3 million users and a year-to-date total trading value of $21.8 billion. In 2019, WazirX was acquired by Binance, the world’s largest crypto exchange.
This April, its WRX crypto token temporarily touched a $1 billion valuation.
CoinDCX’s unicorn status also comes at a time when the crypto industry in India has been facing a period of regulatory uncertainty.
To begin with, the Reserve Bank of India (RBI) banned banks from supporting cryptocurrency transactions in April 2018, preventing crypto exchanges, including WazirX and CoinDCX, from temporarily taking rupee deposits from users.
The Supreme Court struck down the Reserve Bank’s ban in March 2020, once again boosting the morale of crypto companies.
In February, a bill appeared on the agenda of the budget session of the Parliament in February, which was expected to lay the framework for a central bank digital currency (CBDC) and ban all private cryptocurrencies. However, it was never tabled.
Many industry experts believe that an overarching ban is unlikely.
“There are two parts to the bill. One is creating CBDC, where I don’t see a challenge or controversy. The debate has always been on private crypto and whether they should be allowed to be traded or not," said Navin Surya, advisory board member at the Blockchain and Crypto Assets Council (BACC), formed by the Internet and Mobile Association of India (IAMAI).
He added that the industry has proposed regulations, instead of a ban.
Despite the uncertainty, venture capital interest in crypto and blockchain firms in India has only risen. Data from VCCEdge shows that 13 deals worth more than $176.89 million have been completed in 2021 to date, significantly more than the 10 deals worth over $44 million in the previous year.
CoinDCX’s new funding round accounts for over half of the money spent on crypto firms this year. Industry executives, though, expect many more such deals this year.
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