Established less than two years ago, Koinex, the former Indian star exchange, put a "period" under the strict prohibition of supervision and mismanagement. Although regulation has not stopped the market's enthusiasm, Koinex is still one of the most actively traded countries in the world.
The first place once came to an abrupt end.
Yesterday (June 27), Koinex, the Indian cryptocurrency exchange, announced its suspension of operations on its official website. At the same time, Koinex co-founder and CEO Rahul Raj also issued a document saying that considering basic economic feasibility and regulatory policies. Clearly, it is not prudent to continue trading business.
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Koinex began offering digital asset trading services on August 25, 2017. Four months later, it became India's largest and most popular digital asset exchange, with a transaction volume of US$265 million. It also became “the fastest growing venture in India”. the company".
However, on April 5, 2018, with the ban of the Indian central bank, Koinex's growth has stagnated. The Bank of India instructed all regulated financial services entities to cut off contact between companies and individuals trading in virtual currency and block all cryptocurrency related transactions. Since then, Koinex has been facing issues such as the payment gateway being shut down, bank accounts being closed, and payment services for digital asset transactions being denied.
Even for businesses that are not directly related to cryptocurrency transactions, such as the Koinex team's payroll, rent, and equipment purchase services, the relevant personnel are also asked by their respective banks. Also, members of the Koinex team receive an inquiries from their respective banks each month during the salary credit.
In particular, recently, the ban on cryptocurrency and the regulation of official digital currency in the 2019 Act created enough FUD (fear, uncertainty, suspicion) in the Indian cryptocurrency industry, resulting in a sharp decline in transactions." On the eve of the closure, the exchange’s trading volume per day was less than 24 bitcoins.
Policy strikes enthusiasm
The “tragedy” of the Koinex exchange is largely due to India’s unfriendly attitude towards cryptocurrencies.
In early 2018, large domestic banks, including National Bank of India, Axis Bank, HDFC Bank, ICICI Bank, Yes Bank, and Citibank, suspended some accounts of mainstream exchanges on the grounds of “suspicious transactions”.
On April 5, 2018, the Central Bank of India issued an injunction. On April 6, 2018, the Central Bank of India (RBI) issued a ban on the provision of cryptocurrencies by individuals, companies, and other regulated institutions such as banks, payment service providers and non-bank financial companies. The ban on service.
In early 2019, India's Kotak Mahindra Bank explicitly required its users not to engage in transactions related to cryptocurrencies in the account opening agreement.
In April 2019, the Bank of India announced a draft framework for the financial technology regulatory sandbox. Article 6.3 clearly shows that the regulatory sandbox test does not accept 1CO, cryptocurrency, and projects related to cryptographic asset services.
On June 7, 2019, according to Bloomberg News, Indian lawmakers proposed a bill that “suggests investors, traders, and miners of cryptocurrencies to be sentenced to up to ten years in prison.” It is alleged to be part of the 2019 draft “Prohibition of Cryptographic and Official Digital Currency Regulations Act”. If the bill is passed, then the following actions may be illegal in India: directly or indirectly holding, trading cryptocurrencies and mining. Of course, some people question the authenticity of the news.
In order to prevent the emergence of FUD, Indian cryptocurrency supporters have also acted. Blockchain Lawyer founder Varun Sethi presented a petition entitled “Implementing a cryptographic asset regulatory framework in India” to the Indian Ministry of Economic Affairs and the Bank of India (RBI) on Change.org on June 15. As of the morning of June 16, 1,437 people had signed the petition.
Although the policy is opposed, it does not stop the enthusiasm of Indian transactions. According to The Block's analysis of the traffic of the 48 most commonly used cryptocurrency exchanges, it has been found that in the past six months, 50% of these website traffic has come from five countries, and India is one of them.
Undoubtedly, in such an environment, the difficult situation of the exchange can be imagined. It is no wonder that Koinex's suspension was called the "Indian version of 94."
In addition to India, which countries prohibit cryptocurrency transactions?
In mainland China, cryptocurrency transactions and 1CO have been strictly prohibited since September 4, 2017.
Similar to India, the Pakistani central bank issued a statement in April 2018 prohibiting domestic financial institutions from cooperating with cryptocurrency companies. However, according to Cointelegraph's report in April this year, Pakistan's attitude towards cryptocurrency seems to be loose: Pakistan's central bank issued a statement saying that the central bank can license the organization that is willing to use "electronic money", so that the latter can issue "with electronic payment as The purpose of electronic money."
Bangladesh opposes cryptocurrencies, and its government has made it clear that engaging in encryption-related activities will be subject to penalties of no less than 12 years in prison. In 2018, Bangladeshi law enforcement agencies are still actively arresting Bitcoin users.
Nepal’s central regulators ban encrypted transactions, and operators of cryptocurrency exchanges in the country may be arrested and imprisoned.
The Central Bank of Bolivia announced in 2014 that it would completely ban any currency that is not issued or controlled by the government or the state.
The National Assembly of Ecuador has been banned from Bitcoin and other decentralized digital currencies since 2014. However, in February 2018, the Central Bank of Ecuador issued a statement saying that “Bitcoin is not a payment method authorized by the state”, and public opinion analysis said that this statement does not explicitly prohibit “purchasing and selling cryptocurrencies through the Internet”. Even more surprising is the fact that Ecuadorian cryptocurrency supporters ignored the government ban and installed two Bitcoin ATMs in the country's capital in March 2018.
Text | Niu Niu Editor | Tong Source | PANews