After launching about one year ago, BTCXIndia is closing its trading platform because its bank will no longer allow them to operate. The exchange posted a notice on its website stating that they will close down their bitcoin trading platform as of May 20, 2015.
BTCXIndia was the first bitcoin exchange in India offering a secure, real-time trading platform, following KYC and AML guidelines, and allowing instant INR (Indian rupee) deposits and withdrawals.
“We have today been informed by our bank that they will no longer serve bitcoin businesses,” the notice stated. “We have investigated the possibility to operate through other banks, but it seems this is a general policy in India as of today.”
The closing comes despite a clean record serving customers, based on a CCN review of bitcoin websites. “We have been in close contact with banks and authorities to ensure we are as legally compliant as possible in a new industry, and today’s news comes as a big shock to us all,” the notice states.
The closing reflects the challenging regulatory environment that bitcoin has faced in India. CCN also reported today that Unocoin, a trading platform in India, has been at the center of an intensifying debate in India over the legality and regulation of bitcoin.
In January, Reuters reported that India’s central bank, the Reserve Bank of India, cautioned investors to be wary of using virtual currency because of the associated security, financial and legal risks. That caution followed a December 2014 advisory that prompted some Indian bitcoin traders to suspend their operations. The RBI’s worries include taxation, security risks, losses due to the volatility and money laundering.
BTCXIndia will conduct business until May 20. It urges customers to withdraw all funds before this date.
The notice on the website said the decision “is outside of our control.”
BTCXIndia’s trading platform has allowed customers to buy and sell bitcoins and follow their orders in real time.
Also read: Is India cracking down on bitcoin?
The company stored deposits offline for security. The company took measures to reduce the impact of software malfunctions and hacker attempts. It kept its back-end systems separate from the trading platform.
BTCXIndia reported on April 21 that its parent company, S Capital Solutions Pvt. Ltd. became a certified member of National Association of Software & Services. This organization helps the IT-enabled financial services industry in India to be a trustworthy, respected, innovative and society friendly industry.
S Capital Solutions also provides payment solutions, payroll management services, cryptography solutions for financial institutions, crypto-based e-governance solutions and payment solutions for non-government organizations.