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Koinex shuts shop amid crypto uncertainty in India

Koinex shuts shop amid crypto uncertainty in India
By We Play Coins
Added on Jun 28, 2019

Koinex, one of India’s largest cryptocurrency exchanges, has announced that they will be suspending all trading on all their platforms at 2 PM IST, 27th June 2019. In an announcement made on their website koinex.in, the company claimed that continuing to work in India for the last 14 months has been difficult due to uncertainty and disruption caused by recent regulation introduced by the government of India.


A short excerpt on the home page reads as follows –

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.

The company has requested that all digital assets be moved out of their wallets. In a message on the website, the company has made it quite clear that the exchange will be shutting shop soon. They have requested that any digital assets currently stored in the koinex wallet be withdrawn immediately. The deadline for withdrawal has been set to 9 PM IST, 15th July 2019.

Koinex has also mentioned that all INR stored in the exchange will be remitted to their respective accounts. There is no provision to transfer this to crypto or another fiat exchange. The transfer should be complete within the next 5 weeks.

The arrangement of funds from non-crypto resources poses significant economic costs. Therefore, an associated fee will be levied to partially compensate such economic costs and effectively remit user deposits within a reasonable time. In the course of the next 5 weeks, we will release all INR balances to the registered bank accounts of our KYC verified users after levying a convenience fee ranging between INR 10 and INR 2000, depending on the quantum of INR balances.
A snapshot of the wallet balances at this time will be taken for record, and the effort to disburse INR 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. This is a voluntary move and is being undertaken even though it is not our legal obligation, only with a view to reduce the hardship that it is causing to so many of the users who reposed faith and supported our business effort while things were not constrained. This is our way of saying ‘thank you’ and bidding adieu.

Any users with digital assets in koinex has been requested to please note the closure of the exchange and take the relevant action mentioned on the website. The company assures their users that any privacy-related issues like user information will not be released except to the relevant regulatory bodies concerning money laundering and other tax evasion crimes.

Koinex was set up in 2017 and began digital asset exchange services on August 25th 2017. It was the first open order-book, KYC complaint, multi-asset exchange in India. Within the first 4 months of operations it became the largest digital asset exchange in India, with a record $256 Million in trading volume and catering to more than 40,000 new users in 24 hours in December. These initial gains were quickly marred by the Reserve Bank of India circular, on April 6th 2018, to all regulated financial services entities to cut all ties to companies and individuals dealing in cryptocurrencies. It also blocked all crypto-related transactions. While this was challenged in the Supreme Court, the fall in confidence of the users in cryptocurrencies and the sluggish response by the regulatory and government institutions to finalise regulations was too much of a financial burden for the company to bear. As a result, the company has decided to cease all services and shut down the exchange for good.