In 2018, the Reserve Bank of India banned banks from interacting with cryptocurrency exchanges, causing many consumers to sell their crypto on exchanges. The investors were given three to six months to liquidate their holdings. Many who want to retain their cryptocurrency relocated it to overseas exchanges where crypto-friendly legislation prevailed.
Recently, crypto has been in the news for all the wrong reasons, not only due to the precipitous price decline but also due to customers losing their investments as a result of major crypto hedge funds like 3 Arrows Capital folding and exchanges like Vauld suspending withdrawals due to unfavorable market conditions.
Surprisingly, India is one of the top three nations where cryptocurrency usage has risen in recent months. According to research by crypto exchange Gemini, almost 54 percent of respondents from India were first-time crypto investors in the preceding year.
In retrospect, all this chatter about India crypto ban and investors losing money has prompted a large number of individuals to consider if their assets are at risk.
“In the unusual case of a crypto prohibition in India, investor funds are secure and will be refunded to them within a timeframe that will be determined at the time such an improbable occurrence happens. Investors own the cryptocurrencies held on WazirX, and they have the option to withdraw them at any time. As a company, we have never before halted cryptocurrency withdrawals on WazirX, and we have always been clear about any scheduled, temporary maintenance. However, caution dictates that investors verify the crypto ownership and withdrawal terms and conditions on their investment sites.”-Vice President of Wazirx, Rajagopal Menon
Even though the majority of crypto exchanges in India, such as CoinSwitch Kuber and WazirX, act as custodial wallets where they only facilitate the transfer of your funds from Indian rupees to cryptocurrencies and vice versa, these exchanges do not own your funds and you have the right to withdraw them at any time.
It is expected that investors will be able to withdraw their monies or transfer them to other physical wallets in the case of a ban. However, at the end of the day, the government has the last word.
02 Feb 2023
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