Indian cryptocurrency exchange Mudrex has temporarily halted crypto withdrawals, triggering a wave of backlash from the crypto community.
On Jan. 11, Mudrex paused crypto withdrawals on its platform, leaving users puzzled about the abrupt decision.
The company told Cointelegraph that the suspension is temporary, lasting until Jan. 28, and is aimed at upgrading the platform’s compliance framework to prevent misuse by bad actors.
When questioned about the need to pause operations for a compliance upgrade, Edul Patel, co-founder and CEO of Mudrex, said:
“You need to do that with something as critical as crypto. If the infrastructure is not correct, it is very easy for it to be misused for nefarious activities. As a responsible platform, we need to make sure that our systems are in place and we are improving the services at all points in time.”
Notably, Mudrex is one of the few crypto exchanges in India that allow crypto withdrawals.
“We are the only company that has had crypto withdrawals in India for the last three and a half years now, and we continue to stick with that,” said Patel.
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Community backlash
The issue gained traction after a crypto trader, Vivan Live, posted on X, warning Mudrex users to withdraw their funds immediately.
In the post, Vivan wrote:
“Congratulations! Mudrex disables Crypto Withdrawals! Don’t tell me I didn’t tell you! If you haven’t taken your money out yet, convert it into INR – withdraw into your bank and run!”
Another community member, Aakash Athawasya, expressed skepticism about the exchange’s intentions, suggesting that Mudrex “never had [crypto withdrawals] in the first place” and accusing it of offering “price exposure, not ownership.” He said he wouldn’t touch Mudrex “with a ten-foot pole.”
Mudrex reported a 200% yearly increase in its user base, reaching three million, and a 20-fold surge in December’s trading volume to $200 million.
India faces increasing regulatory scrutiny, which has already led to exchanges, such as Bybit, suspending operations in the country. Bybit announced that starting Jan. 12, it would restrict services, including crypto trading, account openings, and placing orders, citing evolving regulatory developments as the reason for its temporary withdrawal from the Indian market.
CoinDCX introduces crypto withdrawals
Indian cryptocurrency exchange CoinDCX has launched crypto withdrawal functionality for its users.
On Jan. 6, Sumit Gupta, CEO of CoinDCX, announced on X that phase one of the rollout will grant access to 1.5 million users, with plans to expand in subsequent phases.
However, users opting for crypto withdrawals will have to permanently disable their Indian rupee deposit functionality, although rupee withdrawals will continue to work.
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