Indian Crypto Exchange Zebpay Asks Users to Withdraw Money Before RBI Freezes Accounts

Jun. 23, 2018

Citing concerns about the use on the dark web and for funding anarchic activities (including terror-mongering), the Reserve Bank of India recentlyinitiated a crackdownon exchanges and similar companies dealing with the trade between digital and fiat currencies – even though it would seemRBI did not do much researchbefore floating the circular.

This means that if you have invested some money in cryptocurrency, your cash might get frozen andyou will not be able to transfer it back to your bank account till RBI reverses its ruling. This is whyZebpay, India’s first crypto exchange, has urged its customers to withdraw funds stored in their crypto-wallets hosted with the service. It haswarned usersthat in case its bank accounts are “disrupted” as part of the RBI’s orders, “rupee deposits and withdrawals will become impossible“.

Zebpay also warns users who choose to still hold money in their wallets thatRBI’s move might also lead to fluctuation in the price of bitcoinand other alt-coins. The exchange also suggests that users cancel any pending trade requests (if any) before withdrawing money from their accounts.

The RBI does not explicitly restrict Indians from trading cryptocurrencies, but has instructed banksagainst facilitating any transaction between the Rupee and digital tokens. The decision gave rise to controversy with agitation and revolt from cryptocurrency exchanges all over India. Many petitions have challenged the ruling and the next Supreme Court hearing is scheduled for July 20.

But despite support from the legislature, includingDelhi High Court, for many exchanges like Zebpay, uncertainty looms. Many of these companies are gradually moving off-shore to continue in the business. Meanwhile, a separate report suggests that India is working on itsnation-wide blockchain networkand might even release itsown cryptocurrencynamed after Lakshmi (the goddess of wealth), which is likely to be regulated by the government, unlike other cryptocurrency.