Cryptocurrency ecosystem in India has been slowly suffocating due to the regulatory troubles in the country. Suppressed under the burden another cryptocurrency exchange Koinex wrapped up its operations.
Earlier this month, the Indian government has taken a tough stance on mining, holding and selling cryptocurrencies, wherein a jail term of up to 10 years is proposed for anyone dealing with cryptocurrency. Koinex, a Bengaluru-based exchange, who was already grappling with issues, further buckles down citing the lack of banking support and regulatory uncertainty in the country.
The list of troubles includes the supply of services from payment gateways and banks and blockage of transactions, amongst other problems.
Last year in April, the country’s central bank, Reserve Bank of India (RBI) banned regulatory sandbox to aid crypto-related startups in any form. As a result, the prices of Bitcoin, Ethereum, and Litecoin experienced a dip, subsequently, exchanges in the country were pushed to shut down. Further, the move also caused mass layoff from crypto exchanges such as Unocoin.
As per a Medium post by its co-founder Rahul Raj, Koinex went offline forever from 2.00 PM IST on June 27, although the wallets will continue to be functional till July 15. Raj added in the blog post:
“Multiple delays by the government agencies in clarifying the regulatory framework for cryptocurrencies despite our pending writ petition in the Supreme Court of India, coupled with regular disruption in our operations, the final decision has been taken.”
Koinex marks the fourth firm that has crumbled down under the pressure. Previously, Zebpaym Coinome and Coindelat faced a similar fate due to the regulatory crackdown.
While the Indian government is taking all possible way to stop cryptocurrencies from gaining traction in the country, Facebook recently announced its s long-anticipated cryptocurrency, LIbra that is planned to launch the country. Though it’s not just Indian, other governments are also behaving cautiously towards the effect that Facebook might have on the ecosystem.
Reportedly, G7 plans to task force led by France in order to manage Facebook’s Libra Cryptocurrency, The Bank for International Settlements (BIS) expresses concern over the disruption that might occur with big tech firms like Facebook Entering the financial space, in its annual report for 2019. The Banking Committee of the United States Senate has asked Facebook to testify its crypto on July 16.
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