- All customers asked to withdraw their funds immediately
- Lack of regulatory certainty and political hostility informed the decision to shut down
Another Indian cryptocurrency exchange has announced suspending services to users. The exchange asked its customers to withdraw all their funds immediately. According to a report on the Quartz Media outlet, Coinome Exchange informed its community of the decision to shut down on May 15, 2019 via an official company tweet. The announcement stated:
“All crypto markets on Coinome will be suspended and any pending/open orders will be canceled, effective 2pm on May 15th, 2019. Customers are requested to withdraw all their crypto assets from Coinome at the earliest.”
Expensive affair for Coinome
No official reason was given as to why the exchange suspended trading activities but anyone with the knowledge of the situation in India could easily figure it out. The business of trying to keep an exchange functional in a country without regulatory certainty or a guarantee that any revenue would be forthcoming can be a tricky and expensive affair.
India’s official position on cryptocurrencies has been controversial to say the least. The Indian Supreme Court adjourned the last hearing of the “Crypto vs. RBI” case and postponed it to July 2019. This left many cryptocurrency enthusiasts in the country a disappointed lot and this could have been one reason that led to the decision by Coinome Cryptocurrency Exchange to close shop, following a similar decision by Coindelta in the adjournment’s wake. The first exchange to close shop and relocate was Zebpay, whose Chief Executive Officer Ajeet Khurana said at the time:
“The Indian environment is highly non-conducive to the crypto business. Our revenue model is only through transaction fees. So by shutting the exchange, we have effectively made our revenue zero. Naturally no company would want to do that if it has a choice.”
No hope in sight for crypto in India
The rain started beating the Indian crypto community in April 2018 when the country’s central bank, the Reserve Bank of India (RBI) barred all cryptocurrency traders and exchanges from operating bank accounts or having any relationship with banks beginning July of that year. This marked the beginning of trouble for the then flourishing digital currency ecosystem in the country. It was that Decision by the RBI that saw crypto firm’s drag the RBI and the Indian government to court. The final hearing of the case has been dragging in court with no solution in sight. Coinome hinted at this in their email to clients stating:
“India is currently going through uncertainty on crypto guidelines and regulations. The government of India has not yet taken a decision on the regulatory framework for crypto exchanges or wallets. Further, the Supreme Court is yet to act upon the public interest litigation (PIL) on (the) regulation of crypto assets.”
The Indian government created a high-level panel to come up with guidelines for the crypto ecosystem, which was given four weeks in February 2019 to conclude its work. Even worse, a recent report seems to suggest the committee is mulling a complete ban on cryptocurrencies.