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Crippled by RBI directive, crypto-exchange Zebpay shuts down

Zebpay has shutdown its cryptocurrency exchange saying that it was unable to find a “reasonable way” to conduct its business. This was following RBI disallowing banks from providing their services for the purchase and sale of cryptocurrencies. The crypto–exchange said in a blog post that the ban has disabled the company and their customers from “transacting business meaningfully.”

In June, Zebpay warned users that they would be unable to cash in on their earnings due to the RBI directive.

Last week, Zebpay notified users that it will cancel all unexecuted crypto-to-crypto orders starting 4 pm on September 28. Remaining coins and tokens would be credited to the users’ Zebpay wallet, which would continue to function after the exchange shuts down.

RBI’s overnight ban in April on banking services was a blow to crypto-exchanges in the country. The regulator had justified the ban by saying that crypto-currencies “raise concerns of consumer protection, market integrity and money laundering, among others.”

The fate of cryptocurrencies in India: a timeline

  • February 2018: During his Budget speech in the Parliament, Finance Minister Arun Jaitley had said that the government did not consider cryptocurrencies as legal tender and that it would take all measures to eliminate the use of crypto assets in the payments system.
  • March 14: A month prior to RBI’s ban, HDFC Bank and Citi Bank had sent out notifications informing their customers that they had barred the use of their credit, debit and prepaid cards for the purchase or trade of cryptocurrencies.
  • April 5: RBI had banned banks from providing their services for exchange of cryptocurrencies and virtual currencies amidst global apprehension about their safety.
  • June 13: An RTI revealed that the RBI’s directive on cryptocurrencies was not backed by public consultation or independent research.
  • July 5: The Supreme Court had upheld the RBI’s directive after hearing two separate cases filed in Delhi HC and Calcutta HC challenging the directive.

ReadThe RBI’s virtual ban on crypto-currencies is illogical

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