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Koinex shuts down; India’s cryptocurrency future looks bleak

In the last few months, Koinex delisted a number of currencies and asked its users to withdraw their coins accordingly.

June 27, 2019 / 03:32 PM IST
Representative Image

Representative Image

Koinex, one of the leading cryptocurrency exchange in India, has shut down its trading services with effect from 2 pm on June 27. It has blamed the 'uncertainty and disruption' in the crypto-sphere in India. The deadline for withdrawing all digital assets from the exchange is 9 pm on July 15.

“Sooner than expected, it is goodbye from Koinex,” the exchange said in its email to its users.

The exchange, in an official declaration on its website, said it has always aimed to do its best to “provide blockchain enthusiasts in India with the highest standard of service in the trading of digital assets”.

Koinex, founded in August 2017, has been having a tough time due to the tough stance taken by the Indian government against cryptocurrency.

“However, over the past 14 months it has become extremely difficult to operate a digital assets exchange business in India,” the official statement stated.

In its blog, Koinex gives a detailed account of the reasons behind shutting down its services.

“We took on immense financial burden to continue trading of digital assets and allow law-abiding Indians to participate in the decentralised revolution that has swept across the globe,” Koinex’s CEO Rahul Raj said. “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.”

In September 2018, India’s largest cryptocurrency exchange Zebpay shut down after the Reserve Bank of India (RBI) had imposed an apparent ban on virtual currencies. Zebpay, founded in 2014, was primarily responsible for introducing cryptocurrency trading to thousands of people in India.

It, however, has its exchange running in Australia, where cryptocurrencies are considered legal tenders and treated as property. Cryptocurrency exchanges, which must be registered with Australian Transaction Reports and Analysis Centre (AUSTRAC), are considered legal in the country as well.
In the last few months, Koinex delisted a number of currencies and asked its users to withdraw their coins accordingly.

The Economic Times reported that Unocoin, another leading cryptocurrency trading platform in India, was laying off the majority of it staff amid regulatory uncertainty. The Bengaluru-based startup reportedly scaled down its team to merely 14 employees in April from over 100 people in February 2018.

While the world has found renewed interest in cryptocurrencies after Facebook announced its cruyptocurrency project Libra, India’s crypto future does seem disappointing at this moment. The draft of Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019 proposes 10-year jail for those who “mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies directly or indirectly.”

Sounak Mukherjee
Sounak Mukherjee Chief Sub Editor, Moneycontrol
first published: Jun 27, 2019 03:32 pm