Crypto AMA Session, Opinion

Is CoinDCX Safe? Open House with Sumit Gupta on Current Crypto Bear Market Scenario

The bear market has been a question we all have been asking about. How long will this last? Why is this happening? With the already bucket full of questions, the news of big corporates sorting layoffs to manage their funds has added more questions regarding the crypto space altogether. 

Being the highest valued crypto company in India, CoinDCX took into consideration the recent market sentiments, and our CEO and co-founder, Sumit Gupta sat with Sandy of Crypto Point Hindi and Adi from Crypto India to answer some of the most concerning questions from the crypto community. Not only did they mention the ongoing FUD around CoinDCX, but also touched upon various basic queries on crypto and how CoinDCX products are constantly being updated for the ease of the users. Let’s take a quick look at the topics they’ve touched upon briefly.

Crypto Crash Explained

Since the pandemic, a lot of money, and huge volumes, close to trillions of dollars have been printed. This overflow of cash has led to an increase in liquidity. To keep a check on that FED has raised its rates in the past month itself. It is roughly going at 1.7% and has a possibility of getting even higher in the near future. Along with this macro reason, there is also the fact that the LUNA crash incident. The de-pegging of the algorithmic stablecoin has been a driving force, along with the other assisting macro reasons like corrections in the public markets, for the crypto market crash of 2022. Apart from these, factual reasons, when market sentiments are down, volatile assets take the first hit, as funds from these sections get drawn out first. The whole scenario clubbed together results in something as big as a market crash.

To be on the safer side of these market situations, it is always better to diversify your portfolio. Have a healthy amount invested in various asset classes.

Additional Read: Crypto Crash Reason

What is the Impact of Bear Market on the CoinDCX Crypto Exchange

The crypto space as an asset class is not new to phases like the current Crypto Winter. Similarly, when CoinDCX was launched, back in 2018, the market sentiments were similar. In April of 2018, RBI issued a banking ban where they asked banks to not deal with crypto assets. This banking ban was later overruled by the Supreme Court in 2022. However, being born in a similar market scenario, CoinDCX as an organization has some hold over the navigation required during times like these. There is no definite process to determine the time period of either a bull run or a bear run. These phases may go on for a couple of years at a stretch as well, but having experiences in these situations has shaped CoinDCX for better navigation capabilities. According to Sumit, CoinDCX is not only aware and prepared for what needs to be done in a situation like this but also what has to be done when the bear run is over. 

How is CoinDCX handling the Current Bear Market Scenario?

The crypto market sentiments have also been led by the recent news concerning certain withdrawals and corporate news. The steps that have commonly been taken are similar to certain communications shared by CoinDCX. This has collectively led to a community-wide thought about various Indian exchanges as to when or if they might have to shut down operations. Understanding the commonly asked questions regarding this in the recent market scenario, Sumit Gupta answered how CoinDCX as a company has its solid risk managing protocols in place and how the organization takes each and every step keeping the users and their well-being in mind. 

CoinDCX as a platform has always been focused on providing the best crypto trading experience to its users. Keeping this in mind had been the fundamental cause why the organization has never taken exposure in any asset class where users’ funds are involved. Secondly, CoinDCX believes in the experience the users get through their apps, and thus, they never go for any exchange of assets that the user has already bought or invested in. The risk management team, comprising of senior members from various asset classes and the BSFI sector, has worked on the fundamentals of the company’s risk management procedures. Thus, where users are involved, CoinDCX believes in risk-free measures.

Additional Read: Crypto Bear Market Survival Guide

Crypto to INR and Crypto to Crypto Deposit & Withdrawal Status at CoinDCX

One of the most asked questions by the community has been regarding the Crypto to INR and Crypto to Crypto deposits and withdrawals. To answer this community question with regards to Crypto to INR deposits and withdrawals, besides the unavailability of UPI and certain other ways through which INRs can be transferred in any user’s account, there has been no other challenge for CoinDCX The teams are constantly working to bring more options for users to have a smoother way of exploring investment options in crypto via INR!

Now coming to Crypto to Crypto deposits and withdrawals, where the users bring in cryptos from other exchanges or platforms. The ultimate goal of CoinDCX is to provide a seamless experience to its users. Keeping that in mind, the company had already been working on decisions regarding what is to be done with C2C deposits, for obvious concerns. Coming to numbers, almost 95%+ users who used the C2C side of CoinDCX never transfers or withdrew any crypto. This behavior is probable to the regulatory scenario at this point. As the Government has not put any clear points on certain aspects of the VDAs, withdrawing or transferring crypto tokens is a gray area for the crypto space in India. However, to cater to the users who are making use of the process CoinDCX is having discussions with the internal teams about a permanent solution and a way forward for the same. 

Note: BTC and USDT withdrawals and transfers are available.

Check out our CoinDCX investment app for more details. 

Why has CoinDCX stopped Crypto to Crypto Withdrawals?

As mentioned before, CoinDCX has always thought 20 steps ahead for the users and how each of their decision as a company can affect the users and their journey. Thus, keeping in mind the gaps in the clarity regarding crypto withdrawals CoinDCX has taken the step of holding off on this functionality.

The recent incident with Vault has led many people to make assumptions regarding CoinDCX taking the necessary steps for crypto withdrawals. However, the two incidents are completely separate for their different reasons. This step would have been taken by CoinDCX either way. There is no black and white answer to this step, other than the lack of clarity in this scenario. CoinDCX is working towards all the decisions keeping in mind the user experience and hoping towards crypto be within the regulatory space. 

Is my fund Safe with CoinDCX?

No matter what decision the platform takes to comply with the regulators, CoinDCX has been conservative in its way of conducting business. As the organization is here for the long run, every decision they take has been taken to cater to the results and the outcome that will be impacting the years to come. 

Keeping that in mind, CoinDCX has also always been conservative in its way of doing business. Their funds have always been distributed majorly in cold wallets. According to Sumit, the major factor contributing to a good exchange is the platform they provide for the users and how bullish they are on their security measures. As an exchange working 24*7 to provide the top security measures to its users, funds with CoinDCX are safe and secure.

Sumit’s Response to FEMA

With the ED news that has been going around, a lot of times the community members have shown concern regarding the platform and how it is going to function. Well, there is no need to worry. All the communication that the Government is having with CoinDCX is regarding the functionality of the whole platform and how the government can keep track of all the transactions taking place within. The more information the government can gather, the more data they can collect the easier it is for them to comprehend the whole scenario and how they will be going about with the regulations. 

Impact on Crypto Trading Volumes due to 1% TDS

The 1% TDS has been detrimental to the trading volume globally; with all exchanges and not just CoinDCX. As crucial a step as the TDS has been for the government, in taking a step towards regulating the crypto space, it has also made sure to lock a hefty amount for traders. Though the 1% TDS can be claimed back while filing for tax returns, throughout the year, this has resulted in a decrease in the trading volume.

The crypto platforms are coming together and working with the government on this 1% TDS as the community itself believes 1% to be a little too much for the investors. For TDS or any crypto-related taxes, the government only has to pass a circular. However, the crypto exchanges are the one who has to code and implement the taxes within the exchanges. Sumit commented that the community is working together to better the experiences and have been having multiple meetings with government officials to understand the taxes fully. 

Read more on 1% TDS on Crypto & 30% Crypto Tax in India

Future Plan of CoinDCX after 1%TDS on Crypto 

CoinDCX as an organization has been moving in a very healthy direction, financially. Although the 1% TDS and its impact on the trading volume have resulted in a dip in revenue, however, that has been manageable. The funds that the organization has raised through series C and series D fundings, along with the revenues generated can comfortably keep the company and its users’ funds afloat for at least 3.5 to 4 years. 

The organization is in fact hiring very bullishly right now. Explore all open roles here, if you want to be a part of this ecosystem!

CoinDCX Ventures

Being a company that has itself during a bear market, CoinDCX is of the belief that good companies are born when there is a crisis in place. These companies pay importance to the value more than anything else. According to Sumit, the rate of evaluating companies had increased a lot compared to before. CoinDCX Ventures was established to support the whole Web3 ecosystem in India. A total of INR 100 crores has been set aside for CoinDCX to invest, over a period of 12 months. 

The vision behind building CoinDCX Ventures was to help give that first boost to start-ups who are trying to solve a real-world problem. Sumit Gupta has huge faith in India’s potential to own the crypto space. During the initial days, in 2018, when CoinDCX was about to be launched, if there were no investors backing the company, CoinDCX would not have been existing today. To help companies in similar situations, Sumit and Neeraj have founded CoinDCX Ventures. If you’re a founder and want to apply to CoinDCX Ventures, all you have to do is send your pitch to [email protected]

CoinDCX Future Trading Plan 

The market correction phase of the crypto space is a good time for companies to reflect back on the needs of the users and what more can be done within the platform to make their investing journey smoother. As the asset classes are not new to the bear markets, it is the best time for the crypto platforms to focus on building better and more advanced products, and that is exactly what CoinDCX is currently doing. A lot of newer features and products are in the development phase for now. Very soon everyone will be able to get access to those!

Summary of the Most Important Questions

Funds in CoinDCX: All users’ funds are absolutely safe with CoinDCX. That is the most important factor for us as an organization. The platform has a robust structure in place to ensure there is no compromise in the funds of the users. Rest assured, whatever is happening in the crypto market has nothing to do with CoinDCX. 

Financial Situation of CoinDCX: As mentioned in the detailed discussion, in the beginning, CoinDCX is financially healthy. Their Series D funding has been huge and they have funds remaining from the previous fundings as well. Users do not have to worry about funding at CoinDCX. The risk management team works tirelessly to ensure whatever decision the company is taking is well considered. The company has enough capital to work very well for at least 50 months, even if hypothetically, there is an INR 20 crores worth of investments every month. 

 Managing your portfolio: The bear market is not a one-time thing for the asset space. Any asset class is volatile in nature. Thus, whenever anyone is looking to invest in a bear market, be careful about the fund allocation along with managing the portfolio with caution. 

TDS on Margin

So, what is Margin Trading? Margin trading with crypto allows users to borrow money against their current funds to trade crypto“on margin” on an exchange. In other words, users can leverage their existing crypto by borrowing funds to increase their buying power. In short: leverage trading can enhance your buying or selling power, allowing you to trade larger amounts. While the Margin product lets the users to leverage up to 10x, the TDS it will attract is on the 10x value. Thus, TDS on Margin is usually higher than the other products. 

Opinion of Sumit Gupta on the Crypto Space

The journey to building CoinDCX has been a very dedicated one. Sumit mentioned he had left a lot of things or opportunities because of his belief in the crypto space. He is very bullish on this asset class and has his faith in a strong crypto space being born within India. It is just a matter of time and together we can survive if there is a crypto winter. 

Read more articles on Crypto Bear Market below: 

  1. Crypto Bear Market Indicators
  2. Crypto Bear Market 2018 vs 2022

Disclaimer: “The information and material contained are subject to change without prior notice including prices which may fluctuate based on market demand and supply.  The material available on the site is proprietary of CoinDCX, its parent, and its affiliates and is for informational purposes and informed investors only. This material is not: (i) an offer, or solicitation of an offer, to invest in, or to buy or sell, any interests or shares, or to participate in any investment or trading strategy, or (ii) intended to provide accounting, legal, or tax advice, or investment recommendations. Please note Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”


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