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One of India’s largest crypto exchanges and trading service provider, Koinex, has recently announced on its official blog that the firm has shut down its trading services as of June 27.
Koinex co-founder Rahul Raj stated in the Medium blog post the following:
“After months of uncertainty and disruption, we have regretfully decided to shut down all digital assets exchange services and operations today.”
He further affirmed that the deadline for withdrawing all the funds which is 9 pm on July 15.
According to Raj, the last 14 months were tough to operate a digital assets trading business in India, as no banks were ready to provide or build a relationship with entities dealing with cryptocurrencies. A circular was released by the Reserve Bank of India (RBI) on April 6, 2018, ordering that all regulated financial services entities must disengage any relationship with companies and individuals dealing with digital assets.
On Koinex’s blog post, Raj has further clarified the exact reasons for shutting down the crypto exchange and trading services.
“We took on the immense financial burden to continue trading of digital assets and allow law-abiding Indians to participate in the decentralized revolution that has swept across the globe. We have stayed away from disclosing details to the public in the larger interest of mindfully steering the industry towards positive regulations, but unfortunately we’re not too hopeful that things will change for the better in the near future.”
He further said that the company had been facing regular payment denials from payment gateways, pathetic responses from the bank regarding the account closure and blocking of transactions for the trading of digital assets. That’s not all of it. The cryptocurrency firm also had issues with non-crypto payment support such as salaries, rent, and purchase of equipment. Koinex team and service providers and vendors have had to answer a series of questions from their respective banks just because of their association with the crypto business.
Toxic Business Environment for Crypto Companies
He also mentioned a proposed piece of legislation called the ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019’ that the government is planning to introduce according to which anyone dealing in cryptocurrencies will face a jail term. The bill has already created enough financial uncertainty and disruption in the Indian crypto trading community, which has caused other crypto exchanges to cease operations as well.
Koinex isn’t the first exchange that has been facing regulatory and banking services issues. Zebpay used to be India’s largest crypto exchange and trading platform, shut down in September 2018 after the Reserve Bank of India (RBI) had imposed an apparent ban on virtual currencies. Another example is the now-defunct crypto exchange Coindelta, which also halted all operations due to hostile environment to cryptocurrency-based companies.
“Sooner than expected, it is the goodbye from Koinex,” the crypto exchange said in its email to its users.