Indian Exchange CoinDCX Restricts Cryptocurrency Withdrawals
- In an email response to questions from Forkast, CoinDCX stated that the restriction is a strengthened mechanism that was gradually implemented over the course of the past month for different users.
- Without going into any detail, the email stated that CoinDCX is concentrating on enhancing its Know-Your-Customer standards as well as risk and compliance management for cryptocurrency deposits and withdrawals.
- According to the statement from the firm, CoinDCX will keep working to safeguard consumers from “ongoing market volatility.”
The restriction is an enhanced measure to strengthen our safety protocols and was gradually initiated over the past month for multiple users, CoinDCX said in an emailed response to Forkast queries. This follows a similar move by Singapore-based cryptocurrency exchange KuCoin, which also restricted crypto withdrawals for some of its users last week. The move by these exchanges comes amid heightened regulatory scrutiny of the cryptocurrency industry globally.
In India, the central bank has been particularly vocal in its opposition to cryptocurrencies. In a 2018 speech, then Reserve Bank of India Governor Urjit Patel called cryptocurrencies “a Ponzi scheme.” Earlier this year, the Supreme Court of India ruled that cryptocurrencies are not legal tender in the country. However, the court did not ban cryptocurrencies outright, leaving it up to individual entities to decide whether or not to allow them.
Given the hostile regulatory environment, it is not surprising that exchanges are taking measures to protect themselves from potential liability. By restricting crypto withdrawals for some users, they can limit their exposure if something goes wrong. Additionally, it is possible that this move could be temporary until the regulatory environment becomes more apparent. For now, though, it appears that Indian exchanges are erring on the side of caution when it comes to allowing crypto withdrawals.
CoinDCX is looking to improve its customer identification process and risk and compliance management for crypto deposits and withdrawals. Elaborating further, the emailed statement said this would help the company meet rising regulatory demands. The move comes as exchanges face greater scrutiny from authorities around the world.
The exchange also focuses on increasing its transparency to build trust with its users. It plans to do this by providing more information about its team, investors, and business operations. CoinDCX hopes these measures will help it stand out in a crowded and often murky industry.
CoinDCX is not the Only Exchange to Halt withdrawals
Celsius Network, a prominent cryptocurrency lending platform, also stopped user withdrawals, swaps, and transfers, citing “extreme market conditions.” This has led to concerns among investors and traders that there may be a liquidity crisis at CoinDCX. However, Sumit Gupta, CoinDCX co-founder and chief executive officer, assured users on June 23 that their funds were safe and there was nothing to worry about.
These recent events have caused some anxiety among cryptocurrency users who wonder if their funds are safe. However, it is important to remember that exchanges are in business to make money and will take whatever measures necessary to protect their assets. If you are holding cryptocurrency on an exchange, it is important to stay informed about the latest developments and contact the exchange if you have any concerns.
Barry Pene is a stern blockchain research/copywriter. Barry has been trading cryptos since 2017 and has been invested in issues that would put the blockchain industry on the right pedestal. Barry's research expertise cuts across blockchain as a disruptive technology, DeFis, NFTs, Web3, and reduction of energy consumption levels of cryptocurrency mining.
