The cryptocurrency exchange platform Koinex has announced that it will not be accepting any more cash deposits in its digital wallet after July 6. Also, they notified that they will not facilitate cash-out facility for cryptocurrency holdings after 2pm on Monday.
Reserve Bank of India’s (RBI’s) regulation announced in April resulted in chaos in the crypto world. After the ban, traders in India found a profitable arbitrage opportunity to mint money.
Customers of Koinex sold their holdings in huge quantities on Koinex as the deadline approached. This ultimately resulted in a huge drop in prices for bitcoins, Ethereum, and ripple, among other virtual currencies. Major cryptocurrencies price were trading at a lower price when compared to other exchanges. Bitcoin was trading at Rs 236,000, while Ethereum cost Rs 15,500 per unit on Sunday but everywhere else bitcoins were traded for Rs 440,000 while Ethereum units were retailing for more than Rs 31,300
RBI ban came in to practice on July 6th but Koinex provided time till Monday for people to withdraw their holdings. According to reports, some banks gave some more days to most bitcoin exchanges to provide time for investors to withdraw their assets. The arbitrage opportunity spread through social media groups such as WhatsApp and Telegram groups constituting virtual currency traders and enthusiasts. Users of Koinex utilized this opportunity.
Some people bought coins from Koinex and encashed their holdings by moving to other exchanges such as Coindelta and PocketBit.
A person who utilized the opportunity said to sources,
“The opportunity was too good to be true.
I used up all my deposits in the account to buy a couple of currencies and got good prices on other platforms which are still allowing buying and selling but one does not know for how long,” said a 28-year-old engineer from Delhi, who claimed to have made use of the arbitrage.
RBI gave banks three months to stop all business relationships with any companies trading or working with cryptocurrencies. Even after the crypto industry applied for stay from the supreme court, the court rejected the stay order last week.
Some cryptocurrency exchanges are still functioning by adopting peer to peer model that doesn’t involve banks. cryptocurrencies can either exchanged for other currencies or can be encashed by international exchanges.
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