India's Exchanges Want to Challenge Central Bank's Crypto Crackdown

India's cryptocurrency exchanges plan to fight back against the Reserve Bank's decision to cut them off from financial services.

AccessTimeIconApr 6, 2018 at 5:35 p.m. UTC
Updated Sep 13, 2021 at 7:47 a.m. UTC

Exchanges in India are discussing ways to fight back against a new edict from the country's central bank, which ordered the institutions it regulates to stop working with companies that offer cryptocurrency services.

Startups like Unocoin, Coinsecure and Zebpay have warned about potential disruptions to their services if their banking providers pull out of the market as ordered in the next three months. But at the same time, statements suggest the industry is preparing to mount a legal challenge.

India's central bank announced the prohibition Thursday, as previously reported. Under the new stipulation, "entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling [cryptocurrencies]."

Coinsecure chief operating officer Jincy Samuel said that industry stakeholders discussing the issue with groups such as the Blockchain And Cryptocurrency Committee of India and the Internet and Mobile Association of India.

"We, along with the other industry players are in talks with IAMAI and BACC to see if they could help us in getting a hearing at the Supreme Court to see if stay orders are possible on the current decision of the RBI," she told CoinDesk.

At the same time, Samuel acknowledged the impact that the RBI's announcement would have on the space, given that it seeks to cut off access to the financial system.

"This will impact all crypto exchanges across to the country, as that would leave users with no options to deposit/withdraw fiat from these platforms. The only way forward would mean that users will move to an alt - alt trading or the cash market," said Samuel.

Unocoin put out a statement earlier Friday, explaining that it hadn't been contacted about the bank ban and that "when they do and if it has an impact on you and /or us, we will surely communicate to you."

Likewise, Zebpay announced on Twitter that "a sudden disruption in banking services could affect our ability to service deposits and withdrawals."

At the same time, the startup remarked that "we remain committed to keeping customer funds and assets secure, and are exploring various options."

Zebpay’s chief executive, Ajeet Khurana, struck a more defiant tone in remarks on Twitter, writing:

"No way I am stopping. We will continue to do what is best for our customers, and what is best for our country. Am studying the present situation and will react shortly. [A]nd we will emerge stronger."

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