Ahead of scheduled Supreme court hearing on crypto aspects in India, one of the oldest Indian cryptocurrency exchange, Koinex decided to shut down its trading platform. This was obviously one of the most shocking news for Indians, specifically for a prospective audience of the platform at the precious time when Bitcoin was on a bull run.
Exclusive Talk with Indian Exchanges
One major question that raised the eyebrows of crypto enthusiast is India is – if regulations were the key reason behind closure, Koinex could also have their registered office outside of India – just like other exchanges decided to do so. Concerning the point, Sumit Gupta from CoinDCX add that;
From what I know, given the regulatory uncertainty, they are not focused on exchange business at the moment. Indian Exchanges will have to move outside the country focusing on global users if the regulations are not favorable to run exchange business in India.
In a similar tone, Nischal Shetty from WazirX detailed;
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. I would say that the banking ban was the single biggest reason for all Indian exchange shutdowns until now.
In addition to CoinDCX and WazirX, another Indian crypto exchange Bitbns also adds “there could be other ways to thrive in the crypto landscape for Koinex if it wishes to – continuing the point, Rahul from Bitbns told;
Yes they could have. We did and we are thriving. We recorded the highest volume traded till date in the last 24 hours.
However, it is worth to note that – during Coindelta’s closure in April this year, Indian crypto community were discussing on ‘pending withdrawal request at Koinex trading platform’. Furthermore, the exchange had delisted few coins Achain [ACT], CyberMiles [CMT], GAS [GAS], Nano [NANO], NEO [NEO] and Zcoin [XCZ] Tokens which wasn’t well received by the crypto community in India – and on top of all, the decision of delisting these Altcoins appeared immediately after the shutdown decision by Coindelta.
Not the First Exchange in India!
On early June 27, 2019 – Koinex published an official blog post, detailing the reason behind its decision – nevertheless, it adds ‘Regulatory uncertainty and Lack of Banking support’ were the key hurdles that stop them running smooth trading operation within the nation.
This is nothing new in India, in past, a couple of other exchanges including Zebpay, Coindelta, Coinome wrapped up their business operation citing unhealthy regulations from the country’s Govt but we ( Coingape) reached out to the current Indian exchanges, what they think about Koinex’s closure and how are they continuing their business in the same country where other exchanges closed their doors.
WazirX, CoinDCX, Bitbns, Instashift, Unocoin are few of the exchanges – currently, live and running their trading activities within the country despite having months of delays on a specific crypto decision by Govt of India. During our talk with Nischal Shetty – CEO of WazirX, Rahul Chitale – Co-founder of Instashift, Sumit Gupta – Founder of CoinDCX, and Rahul Jain – Digital Marketing Manager at Bitbns – it was revealed that the other reason behind Koinex’s decision could be “Cost structure with the fact that the team size was quite big” and their volume which had reduced drastically”.
Staff Salary Via Bank Account
Moreover, on a point of Koinex mentioning “their employees were being enquired for salary transactions from banking authorities”, we asked existing Indian exchanges on how they’re processing payments to their staff. While CoinDCX and WazirX declined to comment – on the other hand, Rahul Jain from Bitbns told that;
Bitbns or Its employee doesn’t face any such bank pressure
While he kept secret about the payment method they’ve been using, Rahul Chitale from Instashift re Rahul Chitale reveals their exchange is an Estonian entity and processed banking operation as per European laws. He says that;
InstaShift is an Estonian entity. We conduct all our banking operations out of the same with complete compliance with European laws. Almost all our operational expenses are paid using Crypto – that includes payroll to our small team (outside India). We also use our own crypto backed debit cards. The few expenses like Cloud are the channel through Fiat in Europe or Canada.
What’s your take on Indian cryptosystem.? Do you think Govt will favor existing exchanges with healthy regulations around crypto & blockchain ecosystem in India.? Let us know in the comment below.
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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