CoinDCX, one of India’s leading cryptocurrency exchanges, is making strides toward addressing a critical concern among Indian crypto investors which is the availability of unrestricted crypto withdrawals.
Sumit Gupta, CEO of CoinDCX, took to X(Twitter) to shed light on the challenges associated with crypto withdrawals in India and the company’s roadmap for resolving them.
Crypto Withdrawals: The Current Challenges
In his detailed thread, Gupta acknowledged the growing demand for unrestricted crypto withdrawals from Indian investors. However, he emphasized that providing such a feature comes with significant risks to both the platform and its users.
Gupta explained that enabling crypto withdrawals without stringent checks could expose the platform to misuse by bad actors attempting to launder money and bypass India’s strict capital controls.
The misuse of crypto withdrawals could result in severe repercussions, including the freezing of exchange bank accounts by law enforcement agencies (LEAs).
Gupta noted that such freezes impact not only the funds of bad actors but also the liquidity of genuine users, a risk CoinDCX is determined to avoid at all costs.
Why Indian Exchanges Face Unique Challenges
Gupta highlighted a stark contrast between the operational hurdles faced by Indian exchanges and international platforms.
Unlike global exchanges, Indian crypto platforms handle INR deposit and withdrawal systems, exposing them to regulatory scrutiny and risks unique to the Indian financial ecosystem.
India’s limited number of banks willing to collaborate with crypto exchanges adds to the complexity. Even minor infractions or LEA inquiries can result in the freezing of bank accounts, crippling the exchange’s ability to operate and affecting user trust.
This situation underscores the importance of a compliance-first approach, which CoinDCX has adhered to since its inception.
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The Solution in the Works
To address these challenges, CoinDCX is developing a robust risk management framework designed specifically for the Indian market. Gupta stated that this framework would include enhanced due diligence measures to grant eligible users access to crypto withdrawals.
While these measures may require additional user data, they aim to ensure that withdrawals remain secure and legitimate.
Gupta emphasized the complexity of the task, noting that creating a risk framework tailored to India’s unique crypto landscape is unprecedented.
Despite these challenges, CoinDCX is confident in its ability to roll out a solution soon and has made this initiative a top priority for 2025.
Crypto Scams in India
India’s crypto industry has witnessed a surge in activity, accompanied by an increase in scams and fraudulent practices. Gupta’s announcement comes at a time when maintaining user trust and ensuring a secure crypto ecosystem are more critical than ever.
Robust risk management practices, such as those proposed by CoinDCX, are essential to protect users from falling victim to scams and to ensure the long-term sustainability of India’s crypto market. Even the crypto exchange Mudrex decided to pause withdrawal due to compliance upgrade.
Building a Safer Crypto Future
Gupta concluded his statement by urging users to be patient as the company finalizes its risk management framework.
In the interim, users can continue to convert their crypto to INR for withdrawals, with the platform’s INR deposit and withdrawal systems operating seamlessly.
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