There has been a humongous surge in the inflow of cryptocurrencies in the last few months while bitcoin has already become a raging point of hike in the market. On the sad part of this changing economic geography, Indian government still outlasts subtle regarding a conclusive point of judgment regarding the establishment of cryptocurrencies in the country. While on the other hand, countrymen are going gaga over the present state of this digital economy because more or less, everyone (every single common folk) is seeing the cryptocurrency market as the future of world economy.
The banking system is siding with minders, causing abrasion between account holders and crypto exchanges. The generalized notion to explain this state of circumstance is conclusively the lack of clarity in the present laws of the land.
And, recently the popular crypto exchange in India, Koinex, posted an update titled, The Truth Behind the Unexpected Delay. In this, in a usually impassioned explanation, the company conjectured the difficulties with INR withdrawals on Koinex that numerous Indians had faced.
A tussle between our payment service partner and their bank has caused an indefinite delay in the settlement of a large portion of deposits to Koinex in the past 2 weeks.
This created a bottleneck in the cash flow of user funds, thus crippling INR withdrawals on the platform.
The government of India has at once been explanatory in its disapproval of cryptocurrency viability, yet it has been detected to control the matter, conquering its banking industry in at least a summary financial penance.
There were raids, too. No one seems to know what to do, and in such cases, the conventional banking industry in any country usually errs on the side of caution.
The country’s Finance Ministry weighed-in at the end of last year, warning of cryptocurrencies, which it refers to as virtual currency (VC):
Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.
The Government or Reserve Bank of India has not authorized any VCs as a medium of exchange. Further, the Government or any other regulator in India has not given license to any agency for working as an exchange or any other kind of intermediary for any VC.
Speaking on condition of anonymity to Quartz, another Indian exchange’s CEO said:
The government hasn’t banned virtual currencies, but has expressed its reservation about them. Our understanding, based on various meetings with our banking partners, is that this (situation) is a result of those reservations. Instead of arm-twisting, it would be better if they could come up with steps to regulate the industry.
The Koinex reported-
We were constrained to temporarily suspend INR withdrawals until the differences between the payment service provider and their bank are resolved. While we have taken firm action, we are also in constant touch with the payment service provider and are providing our complete cooperation to help resolve the matter at the earliest.
And in support of that is a fact that enthusiasts across the world have perceived these scenarios performed out, and the better exchanges often give their customers enough notice to plan. Often, customers have left either disappeared monstrous price swings in one direction or another, helpless as a result of government supervisory infecundity. Australia is a recent example of that.
We want to inform you that your money is safe. The affected deposits are safely held with the payment service provider’s bank in a nodal account (nodal account is a custodial account where users’ money is safely deposited). INR withdrawals will resume as soon as the settlement to Koinex is completed. We expect a resolution within this week.
-the company claimed.
The next business day, Koinex advertised the issue solved for the moment. With neither a word from other exchanges nor any clarification from the regulators.
And so, the general trader and customer suffered for all bad and good reasons!