Why the decision to shut down Koinex – 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. We have stayed away from disclosing details to the public in the larger interest of mindfully steering the industry towards positive regulations, but unfortunately we’re not too hopeful that things will change for the better in the near future.

Amidst all of this, from a basic economic feasibility point of view, it is just not prudent to continue doing this business. The amount of capital, effort and grit that’s required to conduct a complicated business like this is just increasing with no relief in sight — the infrastructure cost alone for operating the exchange platform and ensuring the safety and security of users’ funds is unbelievably high. Adding to that the costs for legal, customer support and a cluster of other functions, continuing to conduct the business is proving to be an unwise idea with no scope to make revenues to cover for them.

Crypto regulations

• Indian Parliament Bills
• Library of Congress – Regulation of Cryptocurrency Around the World