Recently, reports emerged that India was preparing to pass a bill aimed at criminalizing anything cryptocurrency. As per the reports, those involved in mining, transferring, or even handling virtual currencies would be jailed for ten years. The news dominated crypto community gatherings with some considering that the bill if passed, would help in driving a wave of crypto adoption in the country.
Crypto firms are exiting the market
Unfortunately, even before the bill is confirmed whether it’s in existence, crypto firms in India are finding it hard to do business in an environment that traditional financial institutions are not allowed to offer banking services to crypto-focused firms.
The latest firm to close its shop in India is Koinex, a crypto exchange. On June 26, the exchange announced that it’s immediately halting its services in the country.
In a blogpost, Rahul Raj, Koinex’s co-founder, said:
“After months of uncertainty and disruption, we have regretfully decided to shut down all digital assets exchange services and operations today. It is, without a doubt, a sad day for all digital assets and blockchain enthusiasts in India, and we can’t express in words how hard it’s been for us to make this decision.”
Raj also noted that:
“Even for non-cryptocurrency transactions like payroll, rent, and purchase of equipment, our team members, service providers, and suppliers also have to accept bank cross-examination because they are all connected to digital asset transactions…. [the bill reportedly awaiting to be passed] brought a large amount of FUD in the Indian crypto community, resulting in a sharp decline in transaction volume, clearly for law-abiding Indians it has instilled negative emotions.”
Coinome stops serving the Indian crypto community
Unfortunately, Koinex is not the only exchange to find the Indian crypto market uninhabitable. In May this year, Coinome, an Indian crypto exchange, announced that it was exiting the India market with immediate effect.
On May 9, Coinome tweeted:
“All crypto markets on Coinome will be suspended, effective 2 PM on May 15th, 2019. Customers are requested to withdrawal all their crypto assets from Coinome at the earliest.”
In an email sent to its users, Coinome explained that its decision was influenced by the uncertainty on cryptocurrency regulations and guidelines in the country. The explanation also cited the yet to be determined case before the Indian supreme court concerning the regulation of virtual currencies.
Coindelta and Zebpay have also left the scene
In March, Coindelta, another crypto exchange serving the Indian crypto community, indicated that it has withdrawn from the Indian market. For Coindelta, the ban imposed by the country’s top bank, the Reserve Bank India, is to blame for the closure. Additionally, while citing an unfavorable environment, the exchange noted that “economically, it is no longer viable to continue with the exchange business.”
In September 2018, Zebpay, one of the largest exchanges serving the Indian crypto community, halted its services in the country equally lamenting that the RBI’s stand is to blame.
In a blog post, Zebpay wrote:
“The recent past has been extremely difficult. The curb on bank accounts has crippled our, and our customers’, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business. As a result, we are stopping our exchange activities.”
Surely all these closures may be the final nail in the coffin for India. What do you think? Let us know in the comments below.