NEW DELHI: Facing regulatory troubles, one of India's largest cryptocurrency exchange, Koinex, shut down today. "After months of uncertainty and disruption, we have regretfully decided to shut down all digital assets exchange services and operations today," Koinex co-founder Rahul Raj said in a blogpost.
He said the last 14 months have been tough to operate a digital assets trading business in India, on account of the closure of bank accounts holding user deposits.
"We took on 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," Raj said their operations were regularly disrupted amid delays by government agencies in clarifying the regulatory framework for cryptocurrencies.
The crypto exchange has been facing denials in payment services from payment gateways, bank account closures and blocking of transactions for trading of digital assets.
Last year, the Reserve Bank of India (RBI) prohibited regulated entities, including commercial banks, payments banks and small finance banks from dealing with or providing services to facilitate trade in virtual currencies.
It has been reported earlier this month that the government is planning to introduce a new draft bill ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019’ that proposes a jail term for anyone dealing in cryptocurrencies.
Koinex said the news has led to a sharp decline in its trading volumes. All its open orders after 2pm today will be automatically cancelled and the funds will be returned to corresponding wallets.
The RBI has not encouraged the use of bitcoins, and the sale of bitcoins currently is taxed in India. There are an estimated three million bitcoins in circulation in the country.