Zebpay, one of India’s largest cryptocurrency exchanges now has no option but to shut down. Not long ago, the RBI announced that any financial institution is not allowed to facilitate cryptocurrency related transactions. This meant that people had no way to either buy or withdraw cryptocurrencies anymore. This was a scenario the exchange could not survive and hence has decided to finally shut down. “The curb on bank accounts has crippled our, and our customers’, 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.”, said the company.
The Reserve Bank of India (RBI) has been staunchly opposed to cryptocurrencies for a long time now. RBI hardened its aggressive stance even more after the Bitcoin boom in 2017. Then, in April 2018, the RBI cracked down on the entire crypto ecosystem. Lenders were directed “not deal with or provide services to any individual or business entities dealing with or settling virtually currencies.”
Realizing they could no longer function, the Indian cryptocurrency exchanges took the RBI and to court. The legal tussle that followed has been going on for months now. India’s supreme court still hasn’t passed a decision on the issue. While the outcome might come out to be in the favor of the exchanges, how long can they survive the wait? Can any company survive with its revenue being completely knocked out for months? Probably not. “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.”
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2015 was the founding year of Zebpay. The company hit the milestone 200,000 app downloads and an annual turnover of Rs 500 crore in less than two years. When at its peak in 2017, the exchange had between 300,000 and 400,000 users every month. In January 2018, India had 10 cryptocurrency exchanges with five million users, a monthly transaction value of Rs10,000 crore ($1.5 billion).
It’s been one blow after another since then. Multiple exchanges like Zebpay, Unocoin, and Koinex shifted to crypto-to-crypto trading just to survive the crackdown. Its getting harder and harder for these exchanges to survive. “While Zebpay has been a competitor, it’s unfortunate to see they’re shutting down their exchange. The crypto community needs to stay strong and stick together,” said Nischal Shetty, founder and CEO of WazirX. “We need to keep the crypto fire burning in India.”