Crypto investment firm Mudrex has resumed crypto withdrawal services on its platform after a brief halt to upgrade its compliance suite. In an update shared on Tuesday, January 28, Mudrex said it had upgraded and automated its compliance process with Artificial Intelligence (AI). The platform claimed it had improved its systems to combat financial crimes. The company halted its crypto withdrawal service on January 13. The upgrade is Mudrex’s first for the KYC process it has in place for crypto withdrawals.
“In line with the Financial Action Task Force (FATF) and local regulatory requirements like complying with FIU and AML guidelines, Mudrex requires users to verify their details through its Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) processes. These stringent measures are designed to combat financial crimes,” Mudrex said in a statement shared with Gadgets 360.
Alankar Saxena, the co-founder and CTO of Mudrex, shared more details about the development on X. He said the process was critical to prevent bad actors from moving crypto funds around through Mudrex for illegal activities.
Earlier this January, we temporarily paused crypto withdrawals on @officialmudrex to enhance compliance and safety standards. Today, I’m happy to announce that crypto withdrawals are back live for all users, as promised. Huge thanks to our compliance and engineering teams for…
— Alankar Saxena (@alankar_saxena) January 28, 2025
A blog post from Mudrex further explained that it enforces a 14-day cooling period for new users to prevent fraud and unauthorised transactions on the platform. During this period, the platform said, its users must complete their EDD process, under which they are asked to share details like their income source as well as bank statements.
“In the Enhanced Due Diligence (EDD) process, users need to provide additional information to verify the legitimacy of the source of funds. This helps us identify and assess any potential risks associated with their profile,” Saxena told Gadgets 360.
In its blog, the platform added it would verify the recipient’s address before letting crypto tokens be transferred. New or unused wallet addresses for the senders and receivers would have to re-verify themselves, which could take up to seven days.
Mudrex charges a two percent platform fee on the transaction amount. It says these funds are required to maintain the compliance and infrastructure requirements. Some users of the platform have complained about the high platform fees, but the crypto firm maintains its stance.
This fee is for compliance and infrastructure needs. We’re working to provide the best services.
— Alankar Saxena (@alankar_saxena) January 28, 2025
Cryptocurrencies are not comprehensively regulated in India for now. The government, has however, mandated crypto firms to comply with anti-money laundering laws and register with the Financial Intelligence Unit (FIU) to keep track of the companies that are operating in the volatile sector. Crypto firms also must have their customers complete the KYC process during signups so that there is some trail to the otherwise private crypto transactions, which could be exploited for illegal acts like money laundering and terror financing.
Moreover, incidents like ByBit’s recent suspension of crypto trading service — or last year’s WazirX wallet hack leading to a loss of around $230 million (roughly Rs. 1,900 crore) — have also nudged industry players to add more layers of security to their operations.