Problems Faced by Crypto Investors in India
Many Indian crypto exchanges restrict withdrawals, causing frustration among users who can't access their funds after trading.
The absence of clear domestic regulations complicates crypto transactions, with exchanges citing regulatory uncertainty.
Exchanges like Mudrex and CoinDCX have provided inconsistent information about withdrawal policies, confusing users.
Reasons for Withdrawal Restrictions
Exchanges are concerned about penalties for users withdrawing crypto assets, which could lead to legal issues.
Exchanges fear losing liquidity when law enforcement freezes assets during investigations into illicit activities.
Crypto withdrawals could facilitate illegal activities, prompting exchanges to block withdrawals to ensure compliance with security and regulatory requirements.
Options for Crypto Users in India
Investors might sell crypto and withdraw funds as INR, but this may not align with their investment strategy.
Turning to International Platforms: Some traders use foreign exchanges that don't follow Indian tax regulations, posing potential risks.
Decentralised Exchanges: Investors might turn to unregulated exchanges or platforms with weaker safeguards, exposing themselves to higher risks.
Solutions to Enable Crypto Withdrawals
India needs clear crypto laws to protect investors and facilitate secure transactions, as current policies are vague.
Exchanges like CoinDCX and Mudrex are enhancing their security and KYC protocols to eventually allow withdrawals.
Experts advocate for a defined policy to improve security, compliance, and transparency, ensuring safe crypto transactions.
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