2023-02-16 11:30:15
CoinSwitch CEO, Ashish Singhal on - "Why do we not allow Crypto deposits and withdrawals? "
" I’m often asked why CoinSwitch does not support crypto deposits and withdrawals.
Here's my honest take -
India’s crypto ecosystem is still at an early & formative stage of adoption, & many of our retail users are in the early stages of crypto awareness.
As a platform built for every Indian, we have to make some conscious choices on what we offer to our retail users & what we don't.
Decisions on what we don’t offer to retail users are perhaps the toughest.
Three things we currently chose not to do:
● Lending
● Leverage
● Crypto deposits and withdrawals
The last - Crypto deposits and withdrawals is perhaps the most debated.
Crypto private wallets are stored and accessed using private keys. You lose the key, you lose access to your wallet and all the cryptos in it. And this is a fairly big problem, globally.
Nearly 20% of Bitcoin is locked out after users lost their keys — WSJ.
The next concern is movement of crypto from such wallets to grey markets.
India does not have specific regulations for wallet-to-wallet transfer of crypto, but the absence of regulations means there is even greater responsibility on the players to ‘do the right thing’.
Wrongful use of crypto transfers should therefore be avoided, both by crypto trading platforms as well as by users.
Given how nascent the ecosystem is in India, any wrongdoing by even one individual / entity tends to get labelled as an ill in the entire ecosystem.
We can hardly afford that, and CoinSwitch certainly would not like to be a part of that negativity.
Keeping custody of crypto with trusted and KYC-compliant exchanges solves these problems.
We simplify the process of investing: Enabling users to easily buy and sell, while we take care of the security of their crypto.
We use custodial wallets provided by top-tier global companies that require multi-party computation. This means: NO single person at CoinSwitch—even me—can complete a transaction.
This maker-checker mechanism ensures your crypto is transacted only after you ask us to do so.
This also enables us to ensure users’ crypto remains in our KYC-compliant ecosystem.
As always, you can buy and sell your crypto anytime you choose to. And transfer the INR fund to your Indian bank account. Your crypto remains yours :) "
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