CoinDCX’s Crypto Withdrawal Woes: Customers Baffled by KYC Shifts!

According to its website, CoinDCX has over 1.6 crore registered users [File] | Photo Credit: REUTERS

Attention, crypto enthusiasts! If you’re part of the CoinDCX community, you might feel like you’re navigating a stormy sea when it comes to withdrawing your crypto. Users have been raising eyebrows and voices over the exchange’s withdrawal policies, which seem clouded by a haze of mixed messages and complex regulations in India.

Many users have taken to social media platforms, venting frustrations about slow processing times for both crypto and INR withdrawals. In the midst of this chaos, CoinDCX made a statement emphasizing that these withdrawal restrictions are in place to ensure user safety and regulatory compliance.

In an exclusive comment to The Hindu, co-founder Sumit Gupta clarified that CoinDCX is committed to adhering to the strict Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) guidelines established by the Financial Intelligence Unit (FIU). Gupta explained that “unrestricted crypto withdrawals” could open the door to potential threats, jeopardizing both the exchange and users’ funds.

He elaborated, “Imagine bad actors depositing INR and withdrawing crypto for illicit purposes, which could lead to legal authorities freezing our bank accounts where user funds are held. Therefore, we’ve opted for a cautious approach to withdrawals, prioritizing the safety of your hard-earned INR.”

Although Gupta confirmed that crypto withdrawals are largely restricted, users are still free to withdraw INR. Yet, the confusion doesn’t stop there—CoinDCX’s website listed several crypto assets, including popular ones like ETH, as available for withdrawal, even after the restriction announcement.

Adding to the bewilderment, some users have reported not being able to find the “withdraw” option for their crypto, while others claimed the option was still visible for them. To clarify this further, the CoinDCX Cares account on X mentioned that some users may regain crypto withdrawal access if they successfully pass certain checks. However, it also pointed out that some accounts might be linked to banking facilities that do not allow crypto withdrawals.

In a bid to clarify things, Gupta also mentioned that CoinDCX is actively developing an opt-in feature designed to enhance diligence around crypto withdrawals, which will be rolled out gradually.

Interestingly, the restrictions on crypto withdrawals have been in place since the latter half of 2023, and Gupta assured that these decisions are unrelated to the recent news involving WazirX.

Glitches and Delays

On December 21, the CoinDCX Cares account acknowledged a backlog in support tickets due to an unexpectedly high volume of inquiries. Users expressed their frustration over funds being locked and their tickets going unresolved.

Fast forward to January 3, CoinDCX’s website issued a “Downtime Alert,” announcing issues with KYC and PAN verification processes, and assuring users that their teams were working hard to resolve these problems.

On December 30, Gupta expressed empathy for crypto investors affected by the WazirX cyber-attack that occurred on July 18. The fallout from this incident has left many Indian investors anxious about the safety of their assets and the possibility of litigation regarding their funds within India.

Gupta also offered CoinDCX’s assistance to WazirX, stating they might step in and provide capital if needed.

As it stands, CoinDCX boasts an impressive roster of over 1.6 crore registered users, making it a significant player in the crypto space.