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    India's largest cryptocurrency exchange Koinex shuts shop

    India's largest cryptocurrency exchange Koinex shuts shop

    India's largest cryptocurrency exchange Koinex shuts shop
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    By CNBC-TV18  IST (Updated)

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    In the last 14 months, Koinex was finding it difficult to operate a digital assets trading business in India

    With the Reserve Bank of India (RBI) not nudging its decision on banning cryptocurrencies and the case against the ban still lies status quo at the Supreme Court, India's largest cryptocurrency trading exchange Koinex is shutting shop, according to a blog post by founder Rahul Raj.
    Koinex was set up in 2017 and within four months, it was the country's largest digital assets trading fund as it recorded $265 million in trading volume and had more than 40,000 new users in 24 hours during the peak month of December.
    On April 6, 2018, the central bank had released a circular imposing a ban on cryptocurrencies. The central bank said it will not provide services to any entity dealing with cryptocurrencies and ordered them to exit the business within three months from the date of issue of the circular. The circular was challenged in the Supreme Court. However, no such action has been taken. Till date, virtual currencies remains to be banned in India.
    In the last 14 months, Koinex was finding it difficult to operate a digital assets trading business in India as the circular also demanded closure of bank accounts holding user deposits. As much as Koinex tried to take on the financial burden to continue its business, it was unable to.
    Entities, that are not dealing with virtual currencies but were supporting those which are, were directed by the central to lift their support from such entities. This was one of the key reasons for Koinex to succumb to the ban and announce that it is shutting shop.
    Apart from keeping their business afloat, payments services from payment gateways were being denied, bank account closures and blocking of transactions for the trading of digital assets were the difficulties the exchange was facing.
    For non-crypto transactions, such as salary, rent, and purchase of equipment, the team was being questioned by their respective banks, as they were associated with a digital assets exchange operator.
    Along with all the difficulties, the recently proposed bill, Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019, has shaken the crypto market which deepened their losses.
    These difficulties, Raj said, led the team to take the decision of shutting shop. From 2 PM, Thursday, the digital assets trading services will be permanently disabled on all the platforms of Koinex.
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