Compliance Overhaul Sparks Controversy
On January 11, Indian cryptocurrency exchange Mudrex announced a temporary suspension of all crypto withdrawals, effective until January 28. According to the company, the move was taken to improve its compliance framework and ensure stringent measures against misuse by malicious actors.
Mudrex CEO Edul Patel defended the move, saying:
“As an accountable platform, we must have healthy systems to tackle malicious activities and improve customer services.”
Patel had given the move the spin of pre-emptive compliance, which has left quite a few people surprised by a sudden freeze in withdrawals. Critics noted that there had been no such advance notice before the compliance upgrade was implemented.
Community Backlash Intensifies
The news was attracting a broad spot in the limelight as crypto trader Vivan Live issued a warning on X Social Media platform to urge users to immediately withdraw their funds.
“Congrats! Mudrex disables Crypto Withdrawals! Take your funds now or lose them!”
Other members of the crypto community expressed their skepticism about Mudrex’s operations, claiming the platform was not transparent. One such member, Aakash Athawasya, went so far as to state that Mudrex is offering “price exposure, not ownership,” adding that he would not “go near the platform with a ten-foot pole.
These apart, Mudrex is one of the few Indian exchanges that facilitate crypto withdrawals – a feature mostly not supported by the country’s restrictive crypto environment.
Growing regulatory pressure in India
Mudrex’s decision comes amid increasing regulatory scrutiny in India. The country’s evolving regulatory landscape has already prompted some exchanges, such as Bybit, to scale back operations. Bybit recently announced it would halt key services, including trading and new account openings, for Indian users starting January 12.
These developments highlight the ongoing challenges faced by crypto platforms navigating India’s complex compliance requirements while maintaining user trust.
CoinDCX: A Positive Shift
As Mudrex is amidst a controversy, its competitor CoinDCX launched the phased rollout of crypto withdrawal functionality for 1.5 million users. The CEO, Sumit Gupta, said on X that the expansion will be gradual over time. Users, however, can enable crypto withdrawals only after they deactivate Indian rupee deposits permanently. INR withdrawals, however, remain active.
The move by CoinDCX marks a significant step forward in addressing the demands of users for better withdrawal options, setting a potential benchmark for Indian crypto exchanges navigating regulatory pressures.
