Indian Crypto Ban Hitting Hard On Investors
In addition to preventing residents of India from participating in the crypto markets, the proposed crypto ban by the Government of India could also negatively impact investors who have already put their money in digital assets.
More than $100 million invested by Indians in Initial Coin Offerings (ICOs) since 2016 could be frozen in limbo if the proposed ban becomes law, according to the Times of India. Per the reports, Indian investors have put in approximately $111 million between 2016 and the first quarter of this year in ICOs and Initial Exchange Offerings (IEOs). Some industries estimate the figure to be even higher, at about half a billion dollars.
Crypto investors in India are already experiencing hardship
Sources who spoke to the Times of India presume that some crypto investors might be left with no other choice but to give away their crypto holdings to those in more crypto-friendly countries:
“We cannot do a transfer to residentsin India, and looks like we can only gift holdings to those in other pro-crypto countries.”
RBI ban effect on crypto investors
The difficulties faced by crypto investors in India in cashing out was elucidated this month following the closure of the Koinex exchange. After announcing its shutdown, Koinex initiallyset July 15 as the withdrawal deadline. However, it has been extended twice with the final withdrawal deadline now set to be on July 31.
“In view of multiple requests, we are extending the crypto withdrawal deadline till 9 PM IST, 31 July 2019. This is the final extension. Post deadline, we will not be able to support storage/withdrawal of cryptos. Users will be solely responsible for the loss of crypto thereafter.”-@kionexindiavia Twitter.
Besides Indian crypto investors beingunable to cash out, venture capitalists and private equity funds that invested their money in crypto startups may also have to withdraw the investments in the startups whichmight not survive a ban.
According to the startup tracking firm Tracxn, India had 332 blockchain startups as of February this year. A list of the top ten selected by Tracxn showed that cumulatively they have received funding worth more$24 million since 2011.
Regulatory uncertainty killing dreams
Exchanges have definitely been the hardest task among cryptocurrency businesses with some shutting down completely while others moved to other crypto-friendly countries. One of the exchanges that have shut down completely includes Cryptokart, turning one of its co-founders, Gaurang Poddar, from a job creator to a job seeker:
“We’ve decided to shutdown Cryptokart… If you know anyone interested in launching their own exchange, please let me know. Also, I’m looking for opportunities in product management. If you know of any, please connect me.”