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India's Zebpay Crypto Exchange Flash Crash: Bitcoin and Ethereum Price Fall
Zebpay, which is a big cryptocurrency exchange from India, has recently notified its users that it would not be able to let its users withdraw their tokens for INR if it did not have a supporting bank in a document titled “Prohibition on dealing in Virtual Currencies”.
RBI Prohibits Banks From Dealing With Cryptocurrencies In India
The whole problem arose because the RBI, an Indian regulation agency, has decided to stop financial banking sectors under its purview to deal with cryptos. They have to comply with the directive until July 5 and there is a further hearing scheduled to happen on July 20. This decision was taken in April but the banks had 90 days to comply, a date which will terminate on July 5.
This has caused a panic selling in India, as people are afraid that they might lose their money and the price of cryptos went down. Bitcoin was down 13.8% and Bitcoin Cash went down 17.5%. Litecoin, which was somewhat less popular, was down 5.34% and remained less affected by this news.
“India Will Be Tamed By Cryptocurrency Soon. This is a Fact”, Explains Unicoin’s VP
While many people are suffering heavy losses from this notice, some people, as Vishwanath Shastry, the vice president of Unocoin, explained that it is only a matter of time before things start to be normalized.
In a recent interview after the flash crash, the VP explained that the whole market would be affected after July 5 but that the people who could wait would not suffer losses as he believes that it is a fact that India will “be tamed” by cryptos.
After the hearing in July 20, one of three scenarios are to be expected: either the ban will be lifted (a scenario which specialists tend to say that is likely), the date of the decision will be postponed (second most likely scenario) or the ban will not be lifted at all (less likely scenario).
Even in the case that the ban is not lifted by the RBI right now, there is still a chance of this happening in the future.
Investors from outside of India have been known to buy BTC there during the flash crash, as the prices around the world were not as affected as there.
Zebpay Targets Europe’s Growing Crypto Market, Opens Zebpay VFA Exchange Malta Subsidiary
Zebpay Targets Europe’s Growing Crypto Market With Its Newly Opened Malta-based Subsidiary
Zebpay, a Singapore-based crypto start-up recently scaled up to offer its digital wallet services worldwide. The firm developed an App that allows users to safely store their digital tokens making it a popular player in the East crypto arena. A few weeks ago, the company had terminated its crypto exchange services within India’s jurisdiction following the directives from the Reserve Bank of India (RBI) to local banks about non-involvement in crypto businesses. Zebpay has now opened a new subsidiary in Malta, a crypto-friendly jurisdiction where the company’s prospects are brighter!
A Potential Zebpay Market In Europe
According to the latest update on Zebpay’s website, the firm has diversified its services to global markets although it’s yet to be made official by the team. The company opted for a safe haven strategy in Malta where they’ve opened ‘Awlencan Innovations Malta Ltd’. This entity will oversee Zebpay’s newly launched VFA Exchange as the start-up makes an international mark within crypto markets.
India had initially been a hot Zebpay’s operation zone until the firm’s effort to battle RBI’s decision bore no fruit. This resulted to them closing the India based coin exchange since the hurdles brought by bank restrictions simply mean almost no business. Malta serves this start-up as a perfect destination given its links with a promising European market while providing a legally safe ecosystem for crypto transactions.
However, Zebpay will still limit its services to a number of countries. At the moment, the company’s position is to avoid U.S sanctioned economies amongst others. Surprisingly, even the U.S & Japan citizens are not included in Zebpay’s target market & will therefore not be able to leverage the crypto services on VFA exchange.
The company also noted the vulnerability of crypto coins & many ways they can be used illegally. Zebpay plans on implementing strict KYC & AML procedures within its ecosystem to make sure their crypto wallets are used for legal activities. These sentiments are well quoted on the company’s website;
“Zebpay is committed to improving the global fight against Money Laundering and terrorist financing across the European Union. In this connection, the Company has endeavored to carefully ensure all of its internal AML Procedures are in accordance with the amendments to the Fifth Money Laundering Directive.”
Negative Impacts of RBI’s Decision
The moves by Zebpay team to establish an International presence followed the exit from India’s crypto exchange market as we entered Q4. This crypto-oriented firm made it clear that RBI’s decision was one of its main reasons for exit;
“The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business. As a result, we are stopping our exchange activities.”
However, Zebpay’s BTC digital wallet services will still be offered to India’s crypto HODLers.
Earlier in the year, India’s Central Bank directed financial institutions, banks especially to cease transactions with crypto-based businesses. Since then, crypto players in India have faced a heap of challenges trying to reverse the decision. Meanwhile, the coin exchanges have been left to sustain only crypto-to-crypto trading as they await a decision from the Supreme Court of India.
The move by RBI has been criticized by a couple experts in the financial markets. According to their logic, such directives will only push potential blockchain & crypto start-ups to friendly nations within the continent. So far, Singapore, Japan, South Korea & Malta appear to be the leading destinations for crypto ideas seeking a safe haven to grow.
On the brighter side, an Indian based crypto exchange known as Unocoin developed a crypto based ATM supporting five major cryptocurrencies.
Zebpay Exchange Shut Down But CoFounder Still Big on Bitcoin's Future Despite India's Crypto Ban
Co-Founder of Zebpay Says He is More Bullish on Bitcoin than Ever Before!
Co-Founder of Zebpay, Sandeep Goenka took to his social media platform on Tuesday, October 2 to express his current stance of bitcoin [BTC].
In particular, he said that he’s bullish on the crypto giant and offers no other insights as seen right below:
Based on the comments that have since accumulated within hours of the tweet being posted, looks like most followers are angry with Goenka. This doesn’t come of surprise considering the fact that the Indian-based crypto exchange, Zebpay closed its doors and has decided to step away from the business.
The Zebpay team blamed their closure as being India’s central bank, Reserve Bank of India’s doing, namely because of their closed mindedness and strict regulation. According to the team, despite the ongoing regulatory battle, they did what they could to serve Indian crypto investors, however, it wasn’t long before everything became tougher.
While the exchange was shutdown, the Zebpay wallets still remained until 4PM Friday, September 28. It seems like most Indians are against Zebpay because of their unfairness. Here are some of the comments that clearly express despise for the former crypto exchange:
Although Goenka ceased his crypto operations, he still continues to be vocal on the crypto market. As mentioned by News BTC, many investors believe that the Co-Founder is simply trying to please both the crypto community and regulators by showing support on both ends.
Back in February 2018, he discussed the need for regulation and how Zebpay will abide by them if they exist. In particular, he underlined the urgency to eliminate “financing of illegitimate activities” and was supposedly looking forward to working with the government to help “detect, report, and eliminate suspicious transactions.”
Evidently, the words above contradict Zebpay, as it no longer exists. This goes to show that the former crypto exchange and its team bought into the RBI’s pressure and left the crypto sphere once and for all. As seen in the aforementioned viewpoints, said departure only reduces the credibility of Goenka and the team involved, as their comments, especially that of being bullish on BTC becomes meaningless to the community.
India's Largest Crypto Exchange Zebpay Shuts Down Operations Abruptly Over RBI Ban
India’s biggest crypto exchange Zebpay has announced that it will be stopping its exchange business effective from 4 pm today, that is, September 28, 2018. This follows the prohibition of all regulated financial institutions from providing any service in relation to virtual currencies.
The move took many by surprise, coming almost three months after the July 6 deadline for banks to comply with the Reserve Bank of India’s (RBI) ban on offering services to cryptocurrency businesses. “We continued to look for solutions as we did not want India to miss the bus of digital assets that power the public blockchain. However, the recent past has been extremely difficult,” the blog post reads.
Zebpay stressed that its wallet service will continue to operate even after the exchange halts, saying: "Please note that the Zebpay wallet will continue to work even after the exchange stops. You are free to deposit and withdraw coins/tokens into your wallet."
Speaking about the closure of the Zebpay exchange, Nischal Shetty, founder, and CEO of WazirX, another Indian crypto exchange, said:
The fact that Zebpay did not hang in there long enough for the Supreme Court’s decision on the crypto matter clearly indicates the possibility of the decision going against crypto exchanges — the RBI way.
The RBI, meanwhile, in its submission to the court, said that the petition challenging its circular dated April 6 is not maintainable either in law or on facts and, hence, liable to be dismissed as such.
In its notification, cryptocurrency exchange Zebpay clarified,
“Despite regulatory and banking problems along our journey, we continued to look for solutions as we did not want India to miss the bus of digital assets that power the public blockchain. However, the recent past has been extremely difficult. The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully.”
In the meantime, the cryptocurrency case proceeds to be postponed in the Supreme Court owing to the other cases. Being a regulatory affair, the ball is actually in the court of Subhash Chandra Garg, Secretary, Department of Economic Affairs, Ministry of Finance, who is heading the interdisciplinary committee on cryptocurrency and ICO matters. The committee was required to submit its report earlier this month, but there is no update further on this development.