Two of India’s most prominent cryptocurrency exchanges are halting operations on Monday as a result of regulatory pressures making digital currency platforms unpopular in the region.
Tokens marketplace BTCXIndia and affiliated Ethereum trading platform ETHEXIndia have announced decisions to cease their activities, according to the India Times.
BTCXIndia e-mailed a notification to its member, saying the company will not accept deposits effective from January. All deposits received after January 1, 2018 will be automatically redirected to the investor's bank account, the company said. It also advised those who had signed up to immediately withdraw their funds.
BTCXIndia wrote to its members:
“It's been 4 years since we opened BTCXIndia, and 2 years since we opened ETHEXIndia. We have served 35000+ customers during the years and have witnessed the BTC price go up 50x and the ETH price go up 100x. We have kept your crypto safe, and allowed you to trade against others on equal terms, in a safe environment, while adhering to KYC & AML and other tax compliance requirements.”
The exchange went on to note:
“As we heard in the budget speech, the Indian government is discouraging cryptocurrency trading. This has been clear also by government actions in the last year, and has put our business under a lot of stress and putting us in a position where we don't feel that we can continue our business in a professional manner any longer.”
BTCXIndia said it would focus on its consultancy services with "permissioned blockchains" until Indian market regulators have clarified rules on cryptocurrency trading.
It added the consultancy service business was launched in April 2017, claiming to have developed automated escrow management, client registry platforms, and payment solutions for several clients in the health, financial, and agricultural sectors.
A full-pledged blockchain laboratory is scheduled for launch on March 9, BTCXIndia said, expressing hope that the Indian government will come to recognize the huge public benefits of blockchain technology and introduce progressive, clear rules.
India goes after crypto tax
The move by BTCXIndia and ETHEXIndia comes after India’s tax authorities sent nearly 100,000 notices to local digital currency investors under a government plan to collect dues from crypto earnings.
Sushil Chandra, head of the direct taxes department, commented at that time:
“People who have made investments (in cryptocurrency) and have not declared income while filing taxes and have not paid tax on the profit earned by investing, we are sending them notices as we feel that it is all taxable.”