Yet Another Indian Exchange Suspends Activities

By Rishma Banerjee

India’s position on cryptocurrencies have been controversial to say the least, and in what seems to be becoming a regular event, another Indian cryptocurrency exchange revealed its plans to suspend services for its users, from next week. In their announcement they said,

“All crypto markets on Coinome will be suspended, effective 2pm on May 15th, 2019. Customers are requested to withdraw all their crypto assets from Coinome at the earliest.”

Even though an official reason as to why they decided to suspend their trading activities has not been specified by the exchange, it is not at all difficult to figure it out. Keeping an exchange functional when there is no regulatory certainty, and no guarantee of any revenue coming in can be an extremely expensive affair.

Several similar situations have been reported. The first exchange to close shop was Zebpay. Ajeet Khurana, the Chief Executive Officer (CEO) of Zebpay had at that time said,

“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.”

Recently, when the news about Unocoin cutting down its staff by 86% got out, the CEO of the company Sathvik Vishwanath had told us, in regard to operation costs, “If you have a team of 30 with half of them being good tech guys, you are burning easily 35-40 lakhs per month.”

When we had asked about the possibility of more exchanges shutting down due to regulatory uncertainty, Vishwanath had said,

“Depends on how long the uncertainty exists. For now, the exchanges are not self-sustaining in India, which means they are burining the fuel and figuring out.”

In March this year, Coindelta had also announced its plans of shutting down. In an emotional post, it had said,

“It has been really difficult for us to operate Coindelta exchange for the last 6 months. The curb on the bank accounts by RBI has made us handicapped in order to provide seamless deposit and withdrawal services. There has not been any significant progress in the Supreme Court case which makes it difficult to predict when we will see the regulation.”