Zebpay Stops Withdrawal, Crisis Widens for Cryptocurrency Trading In India

With regard to recent Reserve Bank of India circular, dated April 6th, on ‘Prohibition on dealing in Virtual Currencies”, Zebpay has announced that they may be withdrawing support for rupee withdrawal on Friday.

Zebpay is a Bitcoin wallet provider and is headquartered in Singapore. This ban has been challenged in the Supreme Court by Zebpay and others, and the next hearing is scheduled for July 20th.

Further, Zebpay said that their bank accounts will get disrupted as per the RBI directive, which means that rupee deposits and withdrawals will become impossible. This can lead to discontinuation of crypto trade based on rupees, or will lead to significant price movements. Thus, the investors should keep in mind if they choose to hold rupees in the Zebpay account.

Moreover, Zebpay said,

“Please note you will not be able to withdraw rupees unless Zebpay has banking services that permit such withdrawal. Also in case of disruption of banking services, you hereby indemnify Zebpay and agree to hold Zebpay free and harmless at all times, against all claims, proceedings, expenses, cost, action in the event of any prejudice and/or loss caused to you by any act or ommission by Zebpay.”

Zebpay Vs RBI

As already mentioned earlier in the article, RBI in a circular had directed all banks to stop functioning as intermediaries between cryptocurrency exchanges and Indian customers. Further, RBI had given three months of time frame to banks to settle their businesses with the cryptocurrency trading platforms and other related entities, and consumers dealing with cryptocurrencies. This means that the entities and the investors has to settle things by July 6^th, 2018.

On this, Zebpay had approached the Supreme Court of India to challenge this circular and considered this step to be counterproductive and against the interest of citizens. RBI is considered to have taken this step to safeguard the investors but they also said that they are responsible corporation, and they regard customer protection and market-integrity as their primary objectives.

Steps taken After RBI released the circular

In April, Zebpay announced crypto-to-crypto trading in April and fiat trading. They had also added multiple options which includes,

a) An overhauled investor or user experience that allows for easy switching between INR and BTC trading pairs,

b) The dropdown menu of each pair, which includes showed additional information like 24-hour high low and 24-hour percentage change

c) And automated calculation of coin quantity.

Zebpay, being responsible corporation, takes the steps as announced, could affect the cryptocurrency trading in India.