Indian Exchange Mudrex Pauses Crypto Withdrawals Until January 28

Indian cryptocurrency exchange Mudrex has announced that it has temporarily halted crypto withdrawals.

It says this pause is part of efforts to upgrade its compliance suite, which aims to maintain its security standards and prevent misuse by bad actors.

Backlash and Clarification

In a January 12 announcement, the exchange stated, “To enhance the security of our platform and safeguard against bad actors, we have made the decision to temporarily pause crypto withdrawals till January 28th, 2025.”

Mudrex also reassured users that INR withdrawals remain unaffected, crypto deposits are fully functional, and all funds are completely safe and secure.

Despite these promises, the announcement has received backlash within the crypto community. Crypto trader Vivan Live brought the matter to the attention of users on X, advising them to remove their funds immediately by converting their assets into INR to avoid potential issues.

Another community member, Aakash Athawasya, voiced skepticism about Mudrex’s intentions, alleging that the exchange never truly allowed such functionalities and only offered price exposure without ownership.

He also warned users to avoid the platform and instead use on-chain solutions, citing personal losses on Indian exchanges.

However, founder Alankar Saxena responded to the criticism, defending Mudrex’s long-standing support for crypto deposits and withdrawals. He noted that the company had always allowed users to access their funds freely, even when other similar entities limited such functionalities due to regulatory and operational challenges.

The temporary suspension comes amid rapid growth for the company, with its user base reportedly rising 200% and its December 2024 trading volumes increasing 20-fold to $200 million.

Regulatory Pressures

Mudrex’s decision to halt crypto withdrawals also coincides with another exchange, Bybit, temporarily restricting services to its Indian customers effective January 12, 2025.

The company blamed recent regulatory developments and the continuation of previous restrictions for its decision. As a result, customers can no longer open new trades or access products on the platform. However, fund withdrawals remain available.

While India was ranked highly in the 2024 Crypto Adoption Index, it still maintains high levies on digital assets, including a 1% tax deducted at source (TDS) and a 30% flat rate as income tax on crypto earnings.

In December last year, authorities in the country accused several crypto exchanges, including Binance and WazirX, of evading tariffs. According to Pankaj Chaudhary, Minister of State for Finance, Nest Services Ltd, a company linked to Binance, faces nearly $87 million in unpaid Goods and Services Tax (GST) demands.