CoinDCX’s crypto withdrawal vacillation confuses customers over the exchange’s KYC policy

Users of CoinDCX are struggling to understand the company’s policy on restricting crypto withdrawals.

Users of the Indian cryptocurrency exchange CoinDCX are struggling to understand the company’s policy on restricting crypto withdrawals, due to conflicting information from the exchange and India’s patchy crypto regulations.

While users on the social media platform X have complained that their crypto and INR withdrawals are not being processed in a timely manner, CoinDCX clarified that crypto withdrawals are restricted for reasons relating to user safety and compliance.

In response to The Hindu’s question, CoinDCX co-founder Sumit Gupta said that the crypto exchange strictly complied with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) guidelines set by the Financial Intelligence Unit (FIU).

Gupta claimed that “unrestricted crypto withdrawals” could expose exchanges to danger and put their bank accounts at risk.

“For instance, bad actors could deposit INR and withdraw crypto for illicit purposes, potentially leading to the freezing of our bank accounts by legal authorities where we hold user INR funds. That’s why we’ve taken a conservative approach to withdrawals, prioritizing the safety of user INR funds,” said Gupta in an emailed statement.

“For the safety of the majority of our userbase, we are forced to disable crypto withdrawals for all users. Users still have the unrestricted access to make INR withdrawals though,” he confirmed.

However, one source of confusion is that the CoinDCX website included a list of crypto assets that could be withdrawn, including cryptocurrencies such as ETH, even after Gupta’s statement confirming that withdrawals were restricted.