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REUTERS/Dado Ruvic
The axe effect.
ONE MORE DOWN

Yet another cryptocurrency exchange is shutting shop in India

By Nupur Anand

Another Indian cryptocurrency exchange is downing its shutters.

Coinome, backed by the online payment gateway Billdesk, announced yesterday (May 09) that it will be halting operations from May 15. However, it remains unclear if the company plans to exit the Indian market completely or has only temporarily shut shop.

Recent regulatory changes introduced by the Reserve Bank of India (RBI), a lack of policy clarity from the government, and a consequent slowdown in trading volumes, are believed to be the reasons behind Coinome’s move.

“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 cryptoassets,” the exchange informed its customers in an email, a copy of which has been accessed by Quartz.

Coinome is not the only exchange to be stifled by the regulatory environment.

In September 2018, Zebpay, then the biggest cryptoexchange in India, had created shockwaves by announcing the closure of its Indian operations. In March, Coindelta announced its plans to fold its business saying it is no longer viable.

Downhill

In April 2018, India’s central bank barred all bourses and virtual currency traders from maintaining a bank account or having any business relationship with lenders from July that year. This slammed the brakes on the flourishing virtual currency ecosystem.

Hit by the decision, cryptocurrency firms then dragged the RBI and the Indian government to the country’s top court. The final hearing of the case commenced in September last year but till now there is no resolution in sight.

“A lot of people were expecting that the hearing in March will provide some clarity as the government had been asked to bring about a regulation in four weeks but nothing happened,” said the owner of another struggling virtual currency exchange, under the condition of anonymity. “A lot of players are beginning to lose hope.”

A high-level panel was constituted by the Indian government in 2017 to come up with guidelines for the crypto currency ecosystem. Led by the top bureaucrat Subhash Chandra Garg, it has representatives from the RBI and the market regulator Securities and Exchange Board of India (Sebi).

A recent report, which suggested that this committee is looking at a complete ban of cryptocoins, had spooked the market. Now, it is likely that any clarity will emerge only after the results of India’s ongoing general elections are announced on May 23.