Indian Exchanges Froze Suspicious Accounts As Cryptocurrencies Surged Constantly

Some of the Indian crypto exchanges froze low trading volume accounts on suspicion of a Pump and Dump (P&D) scheme.

 As there are no full-fledged KYC protocols for crypto exchanges in India, therefore exchanges were forced to make their own rules.

CoinDCX stated they observed some accounts trading in an illicit manner with the intention to spike the prices of assets. The activity is followed by such investors to sell the shares once the prices surge artificially.

CoinDCX along with other exchanges in Mumbai have doubled their effort in order to identify suspicious transactions. In this effort, they have frozen accounts of four users, suspicious of using pumping and dumping scheme. These four users were suspected of driving the prices up of small cryptocurrency to attract big investors to boost prices.

As there are no official KYC rules and regulations for crypto exchanges in India. The exchanges on their own have drafted certain regulations to save the interest of other users and prevent foul play. The lack of KYC rules or regulations for exchanges in India could be attributed to the proposal of U.S FINCEN. The Finance Crimes Enforcement agency proposed that KYC be made compulsory for non-custodial accounts having over $3,000 in them.

MonarkModi, founder and CEO of Bitex, said that they have to operate very diligently in India. CEO of UAE-based exchange said because of the lack of KYC and AML rules, the exchanges have to operate very carefully. He added that there were times when they flagged some transactions which were against the rules of exchange. He stated after flagging these transactions, details are sought from users of such accounts regarding the source of investment capital.

Mr.Modi said that at Bitex, along with KYC there are strong policies against money laundering as well. He further added that employees at the exchange are strictly directed to ensure the protocols on all transactions.

Co-Founder at CoinDCX, NeerajKhandelwal, said that investors should take precautions before investing in any small or new cryptocurrency. He added that they should inquire into and have gained some knowledge about the currency before having invested in it. He further stated that the new currencies may seem attractive like penny stocks but investors need to do their homework. In the end, he said many pumps and dumps have been observed in small currencies, where users face losses.

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