From RBI’s ban in 2018 to getting a cold shoulder from the Finance Minister Nirmala Sitharaman, and the recent raids by a prominent law enforcement agency — the journey of crypto exchanges in India has, it appears, come a full circle.
Directorate of Enforcement (ED) recently froze assets worth almost ₹65 crore of cryptocurrency exchange WazirX as part of investigation into money laundering involving 16 fintech instant loan apps.
In a bizarre turn of events, WazirX claimed that the crypto exchange is now owned by Binance whereas the latter denied it.
Amid all this, WazirX founder Nischal Shetty – in a latest development – now said that he has all the documentary evidence which proves that Binance controls all trading, deposits and withdrawals on the platform.
Despite these unprecedented circumstances where ownerships of a crypto exchange is seen as a hot potato, Mr Shetty stated that the investors’ funds are, however, safe with the platform.
To allay the investors’ nerves, he stated: “We are not short on money. Would there be a delay in withdrawals if too many people come in at the same time? May or may not. But this can happen to any exchange. But our deposits have not been reduced. User funds are safe with us and have not gone anywhere, it is still in the bank. We never use our user funds for any purpose.”
On this latest crisis in India’s crypto sector, Sidharth Sogani, Founder & CEO of CREBACO said investing in crypto is not risky. “There is no risk as such, however, users must evaluate the exchange's backgrounds before investing and holding funds in them. Exchanges are trying to be compliant in absence of regulations, however, there are many loopholes that need to be fixed. Calculated investments are advised,” he said.
Meanwhile, Gaurav Mehta, CEO, Catax - Simple Crypto taxes, said, "It doesn't seem to be conducive environment in India to invest into crypto as exchanges are under investigation we cannot be sure of positive outcomes. At least, I would recommend to withdraw crypto and not deposit INR in exchange accounts as risk of account freeze is probable."
For the unversed, the enforcement directorate has reportedly raided properties related to Sameer Mhatre, a director of WazirX, reported CoinDesk.
According to the agency, a number of Chinese funds-backed fintech firms did not get authorisation from the banking regulator, promoting them to take the crypto route.
Meanwhile, the crypto rupee index (CRE8), the rupee denominated crypto index, reflecting Indian market conditions, rose 1.25 percent in past 24 hours at 4 pm on Monday, shows Coinswitch data.
Bitcoin trades at ₹19.93 lakh, ethereum at ₹1.36 lakh, Solana at ₹3,530 and ripple at ₹31.95, the Coinswitch data reveals.