We are seeing the current market situation which is in a bearish trend which means there is a continuous dip for a long time. This is impacting the current market to a great extent, not only that but the 1% TDS got applicable on 1st July in India. This made the Indian exchange volume fall down by 60-90%. We can’t forget about the LUNC crash which was the start of this huge dip. The crypto investors are in kind of shock at the moment, especially the new investors and it’s impacting the crypto market growth even though these dips are temporary but there are questions asked by our users in fear in this silent market moment and the Suncrypto will be clearing them through this blog.
What is happening in the crypto market?
Due to this market dip, some of the crypto companies got highly affected with that and most of the companies are facing losses at the moment, some even went bankrupt. The deposits and withdrawal options are disabled on most of the exchanges such as 3 arrow capital, blockfi & vauld crypto. This is the statement released by Vauld crypto that the reason for keeping all these deposits and withdrawals suspended is because their key business partner is having financial issues.
What is the impact of the current market crash on Suncrypto or on any other exchange?
As mentioned in the above section all of the crypto-related companies are facing losses and bankruptcy is close to some and while some already faced that situation. The impact of this current market situation or dip was more on the 3 party-based companies as they had this business model which was quite risky. In such companies, the revenue was made on the interest-based method which means when users deposit their funds in such companies they will use the funds to lend to a third party on interest, and out of the interest, they will cut their margin (which will make their revenue) and return the rest to the users.
Let’s take an example to understand this situation if a user deposited 100,000Rs in an X company. And that company used that money to lend it to a Y company at 15% interest. Hence, when that Y company returns the money the lending company (X) will deduct their margin. Let’s say 5% and the remaining 10% will be returned to the user who deposited money along with their money.
It does look profitable but in case the Y company went bankrupt. During they have taken the loan, they won’t be able to return the money to the X company. Therefore, the X company won’t be able to return the user its money. And that’s what happened in this dip, so many companies went bankrupt making the lending bankrupt as well.
But this is not the case with Suncrypto as Suncrypto works on a totally different business model of brokerage system rather than borrowing and lending. When a user makes the transaction of INR buy or INR sell on Suncrypto, Suncrypto charges a nominal transaction fee from the user and that’s how it makes its profit.
Suncrypto is also affected by the market crash but not that much as only the volume of transactions decreased which has nothing to do with the user funds. Not to mention that Suncrypto was already prepared for such situations so there’s nothing to worry about for the Suncrypto users.
How is users’ fund are safe with Suncrypto Exchange?
More than 95% of Suncrypto’s cryptocurrency is stored on Cold wallets. That are proven to provide top security in holding the cryptocurrency. Also, Suncrypto recently collaborated with the Ledger company to tighten the security and keep the user’s crypto safe. Also, the insurance of $150 million is provided by the ledger to Suncrypto through this collaboration.
There are also some measures taken by Suncrypto to make sure the user’s safety is 100% on the Suncrypto platform. Here every transaction is tracked by our well-trained team. Moreover, regular security checks are done to stop any potential threats.
So many exchanges are eloping out of India, what’s the Status of Suncrypto in that?
There are no such plans and there will be none in the future of Suncrypto to move out of India. Suncrypto is proud of being an Indian exchange. It is standing strong with its Suncrypto users and will be there for its users for a good time. Even when other companies are cutting off employees and shutting down their businesses. Suncrypto is there for its users and planning to provide better services for its users just like collaborating with Suncrypto.
For more, crypto-related news and information stay connected with Suncrypto Exchange and you can read all this information on Suncrypto Academy.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. All content provided is for informational purposes only, and shall not be relied upon as financial/investment advice. Opinions shared, if any, are only shared for information and education purposes. Although the best efforts have been made to ensure all information is accurate and up to date, occasionally unintended errors or misprints may occur. We recommend you to please do your own research or consult an expert before making any investment decision. You may write to us at [email protected].