While the crypto community is still discussing #CoinbaseDown, Indian crypto community is voicing over the sudden “Shutdown” announcement by Koinex, one of the oldest cryptocurrency exchange.
Koinex Shutting Down
On June 27, 2019, Koinex Indian crypto exchange broke out a new announcement, entitling “Koinex shutdown announcement — Termination of exchange services”, with reason citing regulatory delays & banking pressure on employee’s bank account. Koinex managed to be one of the trusted exchange within a short span after its launch during August 2017 – but truth to be told, fear of Koinex’s closure appeared on social media when they delisted NEO, GAS and ACT Tokens soon after Coindelta’s announcement of a shutdown during April 2019.
U can find 1000s of people who would hold $neo for a lifetime. Its a shame u dont have enough volume.
— N Baramy (@naseef36) April 10, 2019
In fact, during these days, Koinex’s users were shouting on social media for their pending withdrawal request on Koinex exchange. We’ve reached out to Nischal Shetty, CEO of Indian WazirX exchange and enquired what would be the possible and basic reason other than banking ban. According to Mr.Shetty banking ban was, of course, the biggest reason for all Indian exchange shutdowns until now, adding that, he continued;
Their volumes had reduced drastically and that makes it difficult to run an exchange since volumes drive revenues. If they had good volumes now then I’m sure they wouldn’t have shut down.
Having said that, the exchange has finally announced to close its operation on June 27 and stated that the trading will be suspended at 2.00 pm IST on Thursday, June 27, 2019.
Koinex shutdown announcement — Termination of exchange The digital assets trading services will be permanently disabled on all our platforms at 2.00 PM IST on Thursday, June 27, 2019. All open orders after this deadline will be automatically canceled and the funds will be returned to corresponding wallets. Users are requested to plan their trading activity carefully and close their trade positions.
So far, there are many Indian exchanges closed their trading operation in India – including Zebpay, Coindelta, Coinome – and the very common reason every exchange has detailed in their blogs is – Regulatory uncertainty on cryptocurrency within the country. Subsequently, the Koinex exchange wrote a blog post, adding a reason for closure is “Multiple delays by the government agencies in clarifying the regulatory framework for cryptocurrencies”. Besides, the regulatory aspect, Koinex also mentioned the difficulty they were facing from banks and payment gateways. It mentioned that;
We have consistently been facing denials in payment services from payment gateways, Koinex added. One of the toughest things to handle is explaining to our team members why they get a call from their bank every month at the time of salary credit.
Further, we asked founders of other existing exchanges on their way of managing employee’s salary but the question remains unanswered until the time of reporting.
Moreover, addressing its users, Koinex adds that within the next 5 weeks of time, they wrote;
In the course of the next 5 weeks, we will attempt to release all user deposits to their registered bank accounts after levying a convenience fee (between INR 10 and INR 2000, depending on the INR 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
Koinex’s announcement has turned out to be the potential opportunity for exchanges like WazirX who quickly notes that ‘it is welcoming welcome all the users of Koinex”. Mr.Shetty on further talk with Coingape stated;
There’s no need to panic. Koinex has given enough time to move your crypto assets and WazirX welcomes everyone from Koinex.
It is worth to note that the exchange has earlier received VC funding which striking out a new query on why not exchange afford to have its office registered outside of India – Just like other existing exchanges announced their advanced plan – if at all regulators impose a strict ban.
Tabassum is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Follow her on Twitter at @Tabassumnaiz and reach out to her at Tabassum[at]coingape.com