After several months of uncertainty in the cryptocurrency regulations in India, Koinex has finally decided to shut down all digital assets exchange services and operations.
It announced on its website, “Since we began operations in August 2017, we at Koinex have always aimed to do our best to provide blockchain enthusiasts in India with the highest standard of service in the trading of digital assets. However, over the past 14 months, it has become extremely difficult to operate a digital assets exchange business in India. After months of uncertainty and disruption, we have regretfully decided to shut down all exchange services and operations from 27th June 2019.”
However, users can safely withdraw their cryptocurrencies till 15th July. Koinex will start releasing all balances to customer’s registered bank accounts once the trading has been suspended and will complete the process in 5 weeks.
The trading services will be permanently disabled at 2.00 PM today. Any open order will automatically be canceled after the deadline and funds will be transferred to corresponding wallets.
Koinex will disburse the funds from its own resources as the bank accounts with user funds are still frozen and the capital is held up with banks. In the course of the next 5 weeks, Koinex will attempt to release all user deposits to their registered bank accounts after levying a convenience fee between ₹10 and ₹2000, depending on the ₹wallet balance.
The digital assets wallets will continue to be functional, and users will be required to withdraw all funds from the platform before 9.00 PM IST on July 15, 2019. Failing to do so may result in forfeiture of their funds, in case they are unable to keep the wallet function alive post the aforementioned timeline.
Rahul Raj, co-founder of Koinex says, “As a bunch of energetic product-oriented professionals, we will continue to focus towards serving the Indian populace. We remain committed to our goals of enabling financial sovereignty and deepen financial inclusion, even if digital assets are no longer the vehicle we use to accomplish these goals. India is a dynamic economic powerhouse and we are on our way to find the next big challenge that propels growth and changes the lives of over a billion people.”
Founded by Aditya Naik, Rahul Raj and Rakesh Yadav in 2017 as the first open order-book and fully KYC compliant multi-asset exchange, the startup recorded $265 million in trading volume and 40,000 users within 4 months of operation. Koinex is backed by Pantera Capital which infused an undisclosed amount in the startup.
On April 6, 2018, the Reserve Bank of India issued a circular instructing all regulated financial services entities to exit relationships with companies and individuals dealing in virtual currencies and block all such crypto-related transactions. While the RBI circular, resulting into a complete banking ban, has been challenged in the Supreme Court of India, the status quo since April 2018 continues till today.
During the last 14 months, digital assets trading startups in India has suffered a lot due to the closure of bank accounts holding user deposits. This caused immense financial pressure to continue trading of digital assets.