India’s Koinex Cryptocurrency Exchange Announces Shutdown Amidst Growing Regulatory Uncertainty
India’s cryptocurrency future looks very much bleak at this stage and long time looming regulatory uncertainty is badly hurting the local crypto businesses. Koinex, one of the largest cryptocurrency exchanges in the country announced shutdown on Thursday, June 27, citing regulatory delays and bank restrictions.
The recent draft bill proposing a ban on cryptocurrencies has laid down an atmosphere of fear and unrest among Indian cryptocurrency investors. Koinex noted that this has dried up the trading volumes on the exchange while badly hurting the business operations of the crypto exchange.
Koinex co-founder Rahul Raj made the official announcement of Thursday stating: “After months of uncertainty and disruption, we have regretfully decided to shut down all digital assets exchange services and operations today. The digital assets trading services will be permanently disabled on all our platforms at 2:00 PM IST on Thursday, June 27, 2019. All open orders after this deadline will be automatically cancelled and the funds will be returned to corresponding wallets”.
The exchange has further given users some time to withdraw their funds by keeping its wallet services functional till the 15th of July. The exchange has requested its users to abide by the deadline as failing to withdraw the funds might result in forfeiture of their funds.
Coiner’s journey started back in August 2017, when owing to the crypto craze the exchange recorded a massive $265 million trading volumes just in four months by December 2017. Until now, the exchange had over one million registered users and has executed more than 20,000 orders worth over $3 billion.
However, the Indian government and banks have been pulling the plug for local crypto businesses and this made things go from bad to worse. Last year, India’s central bank asked all other registered baking institutions to cut ties with local crypto exchanges. This resulted into a major cut-down on the fiat deposits hampering the exchange’s business to a great extent.
Koinex states: “We have consistently been facing denials in payment services from payment gateways, bank account closures and blocking of transactions for trading of digital assets. Even for non-crypto transactions like payment of salary, rent and purchase of equipment, our team members, service providers and vendors have had to answer questions from their respective banks — just because of an association with a digital assets exchange operator. “
Koinex stated that in the coming few weeks, the exchange will make all attempts to release user deposits to their registered bank accounts. It explained:
“A snapshot of the wallet balances at this time will be taken for record, and the effort to disburse [Indian rupee] balances will begin immediately. Since the bank accounts with user funds are still frozen and the capital is held up, we have made arrangements for funds from our own resources, so that we return as much as we possibly can, back to our users and alleviate their position in reference to the funds held up in these frozen accounts.”
Over the last year, other crypto exchanges like Zebpay, Coinome, and Coindelta also announced their shutdown owing to the regulatory pressure. This is certainly sad for Indian crypto investors who are willing to be a part of the crypto ecosystem but are getting choked from all ends due to the government’s uncertain stand on digital assets.