Indian Crypto Exchange Mudrex Halts Withdrawals, Raising Community Concerns

Highlights:

• Mudrex halts crypto withdrawals until January 28 for security and compliance upgrades.
• The crypto community reacts with warnings urging users to withdraw funds amid the pause.
• CEO Edul Patel reassures users that the pause aims to enhance security and service quality.

Indian cryptocurrency exchange Mudrex temporarily halted crypto withdrawals on January 11, raising concerns among its users. Edul Patel, Mudrex’s co-founder and CEO, explained that the withdrawal pause, scheduled until January 28, is due to a compliance framework upgrade. The update aims to enhance security and prevent misuse by malicious actors. He reassured users that INR withdrawals continue as usual and all funds are secure.

Edul Patel 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.”

Mudrex is one of the few crypto exchanges in India offering withdrawals. In August, it obtained a court order to shut down websites misusing its brand to scam users. Scammers had impersonated Mudrex employees on Telegram, luring investors with rewards and job offers.

We have temporarily paused crypto withdrawals on @officialmudrex, not permanently. This step is part of our effort to upgrade the compliance suite to avoid bad actors. Our priority is to serve our investors in the best and most compliant way possible. We will be able to complete…

— Alankar Saxena (@alankar_saxena) January 12, 2025

The crypto exchange reported a 200% year-on-year growth in its user base, reaching three million users. Additionally, the platform experienced a 20-fold surge in trading volume in December, hitting $200 million. However, this decision comes at a time when India is tightening its crypto regulations. 

Crypto Community Reacts as Mudrex Halts Crypto Withdrawals

The matter drew attention after crypto trader Vivan Live warned Mudrex users on X to withdraw funds immediately.

In the post, Vivan stated:

“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!”

Aakash Athawasya stated that Mudrex only provided price exposure, not actual crypto ownership or withdrawals. He joked that he wouldn’t touch Mudrex with a ten-foot pole and suggested others avoid it too.

I am not touching Mudrex with a ten-foot pole. And neither should you.

If an exchange says they’re stopping crypto withdrawals that means (IMO) they never had it in the first place. All they’re giving you is “price exposure” not ownership.

Right now, they’re marketing to…

— Aakash Athawasya (@AakashAtha) January 11, 2025

Impact of Stricter Crypto Regulations on Indian Exchanges

India’s stricter crypto regulations have caused some platforms to halt operations. For instance, Bybit announced on January 12 that it would reduce services like trading and account creation. Bybit stated the move was due to recent actions by Indian regulators and ongoing restrictions. The company highlighted its ongoing efforts to register with India’s financial regulator as a virtual digital asset service provider.

Indian government has required all VDA service providers to register. This includes offshore providers serving Indian users. Registration must be done with the Financial Intelligence Unit under the Prevention of Money Laundering Act.

Meanwhile, CoinDCX, another Indian exchange, has rolled out crypto withdrawals. Starting on January 6, users can access this feature. However, users choosing crypto withdrawals must permanently disable INR deposits, but INR withdrawals will still be available.