CoinDCX Puts Futures Into Reduce-Only Mode After Binance Disruption

CoinDCX moved its futures market into reduce-only mode on Oct. 30 and told users the change followed "recent developments impacting a global liquidity provider." The mode blocks new futures positions and increases to existing long and short bets, while leaving closes, margin adjustments and open orders available. The exchange said deposits, withdrawals and customer funds were unaffected, and it did not give a timetable for returning to normal trading. InvestIn.News reviewed the posts announcing the change.

CoinDCX, one of India's largest cryptocurrency exchanges, described the step as a precaution. Traders could not open new contracts or enlarge existing ones while the restriction was in place, but they could add or reduce margin and close or shrink positions at any time, and open orders kept executing. Spot trading continued without interruption. In a reply to a customer, the exchange's support account said CoinDCX "has temporarily moved Futures trading to Reduce-Only Mode as a precautionary measure in light of recent developments impacting one of our global liquidity providers," a message embedded in the InvestIn.News report.

The exchange's own notices referred only to a global liquidity provider and never named the venue. The identification came from a CoinDCX spokesperson who told CoinDesk that the provider was Binance, the connection that the InvestIn.News report sets out because it was absent from the public posts.

The restriction arrived hours into the Binance security incident, which began late on Oct. 29. Binance has estimated the total impact at around $6.3 billion and said roughly $3 billion of the affected assets has been frozen onchain with the help of issuers and blockchain security firms, Cointelegraph reported. Tether said it froze more than $1.567 billion of USDT linked to the incident and Circle said it froze more than $800 million of USDC, according to the same live coverage.

Binance said its initial findings point to a compromised DevOps engineer's laptop that let an attacker reach an internal service and submit unauthorized withdrawal transactions, with no evidence of a wallet private-key leak, and later updates said the review had uncovered additional points of breach, The New Indian Express reported. The exchange set aside more than $6.34 billion in company funds to cover losses, about $5 billion of it already held in the tokens that were taken, and kept withdrawals paused while it rebuilds the withdrawal service. Co-CEO Richard Teng said the exchange aims to restart withdrawals within 40 hours and publish a full proof-of-reserves report by Monday, Cointelegraph reported.

The pause rippled to venues that lean on Binance for futures liquidity. The impact reached India because local exchanges use Binance as a source of liquidity for futures products, according to The New Indian Express. While Binance's withdrawal service was offline, CoinDCX users could no longer open new futures positions or add to the ones they held.

Other venues tightened controls during the same incident. Aave froze new deposits and borrowing across its V3 and V4 deployments as a precaution on Oct. 29 after the attacker deposited 60 million USDT and borrowed about $44.6 million of wrapped ether against it, risk service provider LlamaRisk said. Aave lifted the freeze on Oct. 30, and founder Stani Kulechov confirmed that lending and borrowing were re-enabled with all positions still overcollateralized, as Cointelegraph's live coverage recorded.

Govind Rammurthy, chief executive and managing director of the security firm eScan, said the incident pointed to weaknesses in access controls and in the separation of development systems from transaction-signing infrastructure. "The hard part of this heist wasn't out-thinking or out-manoeuvring Binance's defences with machine intelligence; it was getting into the right machine," he said. He cautioned that the cause remained under investigation and that any involvement of artificial intelligence had not been publicly confirmed, as The New Indian Express published.

CoinDCX reopened futures trading later the same day and posted that the market was "fully operational across all markets, except 4 tokens that remain in Reduce-Only mode as a precaution." The four are SOPH, ERA, GTC and LA, on both INR and USDT pairs. The exchange said its risk team was watching those markets for potential market manipulation and unusual volatility. Positions in them can be closed or reduced and margin can be added, but new exposure stays blocked. CoinDCX did not say when the four markets would return to full trading.