As the Reserve Bank of India (RBI) and government authorities continue to maintain their stance on holding a ban on cryptocurrencies, India's largest cryptocurrency exchange, Koinex said on Thursday that it will shut its operations.
In a blog post, founder Rahul Raj 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."
The exchange was set up in the summer of 2017. In December of the same year, when bitcoin hit its peak price of $19,000 and cryptocurrencies became the talk of the town, Koinex added more than 40,000 new users in 24 hours.
In the beginning of the following year, governments around the world were scrutinizing the use of digital currencies and how to bring them under a regulatory. The popularity of cryptocurrencies have been on the ground that these are not issued by a governmental body and not regulated but only governed by the blockchain technology.
In the blog post, Raj explains that, "On April 6, 2018, the Reserve Bank of India issued a circular instructing all regulated financial services entities to exit relationships with companies and individuals dealing in virtual currencies and block all such crypto-related transactions. While the RBI circular, resulting into a complete banking ban, has been challenged in the Supreme Court of India, the status quo since April 2018 continues till today."
On the decision to shut operations, he said, "The last 14 months have been tough to operate a digital assets trading business in India, on account of the closure of bank accounts holding user deposits. We took on immense financial burden to continue trading of digital assets and allow law-abiding Indians to participate in the decentralized revolution that has swept across the globe. 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 after duly considering all the latest developments in the crypto and blockchain industry in India."